Debt Settlement Market Report 2025

The debt settlement market size has grown strongly in recent years. It will grow from $9.0 billion in 2024 to $9.84 billion in 2025 at a compound annual growth rate (CAGR) of 9.4%. The growth observed during the historic period can be linked to increasing unemployment rates, higher consumer credit card usage, a rising household debt-to-income ratio, escalating medical expenses without insurance, and elevated interest rates in previous debt cycles.

The debt settlement market size is expected to see strong growth in the next few years. It will grow to $13.91 billion in 2029 at a compound annual growth rate (CAGR) of 9%. The anticipated growth during the forecast period is driven by the rising cost of living outpacing wage increases, an uptick in buy now, pay later (BNPL) defaults, greater dependence on unsecured digital lending platforms, increased student loan repayment challenges following forbearance, and escalating financial stress among younger generations. Key trends expected in this period include progress in AI-powered debt negotiation tools, innovations in digital payment platforms, updates to regulatory frameworks, enhancements in financial literacy programs, and the adoption of blockchain technology.

The rising use of credit cards is anticipated to drive growth in the debt settlement market. Credit cards, issued by banks or financial institutions, enable users to borrow funds up to a certain limit for purchases or cash withdrawals, with repayment due later, often including interest. This increase in credit card usage stems from consumers’ growing preference for convenient, secure, and cashless transactions. Debt settlement services assist credit card holders by negotiating with lenders to reduce the total outstanding balance, allowing borrowers to pay less than what is owed and avoid default or bankruptcy. For example, in April 2025, Expensify, a US-based software company, reported that over 800 million credit cards are in circulation in the United States, with the average American holding 3.9 cards. Credit cards account for about 31% of all payment transactions, and their payment volume grew by 8.2% year-over-year in 2022. Consequently, the expanding use of credit cards is fueling growth in the debt settlement market.

Leading companies in the debt settlement industry are focusing on advanced technologies such as voice AI agents to improve customer engagement, streamline collections, and maintain compliance. A voice AI agent is an artificial intelligence system that interacts with users through spoken language, automating tasks such as debt reminders, negotiations, and customer support. For instance, in April 2025, Kikoff Inc., a US-based credit-building platform, introduced an AI-powered Debt Negotiator designed to help users automate debt repayment plans and efficiently negotiate with creditors. This technology automates interactions with debt collectors, reducing debt by an average of 30%, making debt relief more accessible and affordable. It also lowers user stress by managing calls and achieves higher success rates compared to human negotiators. The goal is to offer millions of Americans a smarter, more inclusive way to manage and resolve their debt, enhancing their financial well-being.

In March 2025, Perfios Software Solutions Private Limited, an India-based B2B SaaS fintech company, acquired CreditNirvana for an undisclosed amount. This acquisition aims to strengthen Perfios’s AI-driven debt management capabilities and provide a comprehensive, technology-first financial services platform that optimizes the entire customer lifecycle for financial institutions. CreditNirvana, also based in India, specializes in debt management and offers debt settlement services.

Major players in the debt settlement market are Freedom Debt Relief LLC, National Debt Relief LLC, The J.G. Wentworth Company LLC, ClearOne Advantage LLC, GreenPath Financial Wellness, Americor Funding LLC, Century Support Services LLC, TurboDebt LLC, Alleviate Financial Solutions LLC, CreditAssociates LLC, Timberline Financial LLC, InCharge Debt Solutions Inc., CuraDebt Systems LLC, DMB Financial LLC, Accredited Debt Relief LLC, Consumers Alliance Processing Corporation, Greenwise Debt Relief, New Era Debt Solutions Inc., Pacific Debt Inc., Clear Coast Debt Relief, and Pioneer Credit Counseling.

North America was the largest region in the debt settlement market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in debt settlement report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the debt settlement market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the financial sector, particularly in investment strategies and risk management. Heightened tariffs have fueled market volatility, prompting cautious behavior among institutional investors and increasing demand for hedging instruments. Banks and asset managers are facing higher costs associated with cross-border transactions, as tariffs disrupt global supply chains and dampen corporate earnings, key drivers of equity market performance. Insurance companies, meanwhile, are grappling with increased claims risks tied to supply chain disruptions and trade-related business losses. Additionally, reduced consumer spending and weakened export demand are constraining credit growth and investment appetite. The sector must now prioritize diversification, digital transformation, and robust scenario planning to navigate the heightened economic uncertainty and protect profitability.

Debt settlement is a process in which a borrower and a creditor agree to resolve an outstanding debt for an amount less than the original balance. This typically involves a one-time payment accepted by the creditor as full repayment of the debt. This approach is often chosen when the borrower is experiencing financial difficulties and cannot pay the entire amount, enabling both parties to settle the debt while reducing further financial losses.

The primary categories of debt settlement include credit card debt settlement, mortgage debt settlement, student loan debt settlement, medical debt settlement, personal loan debt settlement, and others. Credit card debt settlement involves the borrower negotiating with the credit card issuer to pay a reduced lump sum as full settlement of the debt owed. Debts are classified by value into low-value (up to $10,000), medium-value ($10,001 to $50,000), and high-value (over $50,000). These settlements are facilitated through online or digital platforms as well as offline or traditional methods, serving end users such as individuals, small and medium enterprises, and large enterprises.

The debt settlement market research report is one of a series of new reports that provides debt settlement market statistics, including debt settlement industry global market size, regional shares, competitors with a debt settlement market share, detailed debt settlement market segments, market trends and opportunities, and any further data you may need to thrive in the debt settlement industry. This debt settlement market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The debt settlement market includes revenues earned by entities by providing services such as financial consultation, debt reduction programs, and legal support guidance. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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