Recovering from a Contractor Gone Wrong…Without Bankruptcy
UpdatedMar 14, 2025
- Pamela L. encountered debt problems after a botched home renovation
- She turned to Freedom Debt Relief for assistance and to avoid resorting to bankruptcy
- Pamela says she appreciated the way Freedom Debt Relief explained the process and worked with her along the way
When Pamela L. set out to build an addition on her house, she had no idea she would end up with a shaky foundation, sub-standard plumbing and an unlivable home. Nor did she realize that in redoing all the work, she’d end up with no retirement savings, maxed-out credit cards and a mountain of debt.
She chose the Freedom Debt Relief program to help her pay what she could without resorting to bankruptcy. “I have worked as hard as I could to keep my Beacon [credit score] up, to keep my credit established…I knew if I went in bankruptcy, it would mess all that up,” Pamela said.
Bankruptcy, she added, “is so final. It seems like it lingers on your record forever.”
With the Freedom Debt Relief program, “I knew my Beacon [credit score] would go down…but it would eventually come back — and it wouldn’t be on my record that I actually went into bankruptcy.”
Plus, “it was my debt. Hands down, I feel like if I owe it, then I need to pay it,” Pamela said. So even though she was struggling, she wanted to pay what she could. The Freedom Debt Relief program was a way to get the help she needed.
Pamela noted that the Freedom Debt Relief representatives explained everything about the process up front and said she felt that the monthly payments she made were reasonable. She also appreciated the support she got from Freedom Debt Relief throughout her journey. “You have to stick with the program. I needed that structure. I needed that to help me to focus.”
“It was a long process, but it paid off in the end and saved me a lot of money,” Pamela said.
Today, Pamela says her credit score has recovered, she has completed the work on her home and refinanced her mortgage. “Thank goodness I found Freedom and went this route,” she concludes. “There were little bumps in the road along the way, but all-in-all, it was, for me, the best option. A win-win.”
Debt relief stats and trends
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during November 2024. The data uncovers various trends and statistics about people seeking debt help.
Credit utilization and debt relief
How are people using their credit before seeking help? Credit utilization measures how much of a credit line is being used. For example, if you have a credit line of $10,000 and your balance is $3,000, that is a credit utilization of 30%. High credit utilization often signals financial stress. We have looked at people who are seeking debt relief and their credit utilization. (Low credit utilization is 30% or less, medium is between 31% and 50%, high is between 51% and 75%, very high is between 76% to 100%, and over-utilized over 100%). In November 2024, people seeking debt relief had an average of 79% credit utilization.
Here are some interesting numbers:
| Credit utilization bucket | Percent of debt relief seekers |
|---|---|
| Over utilized | 30% |
| Very high | 32% |
| High | 19% |
| Medium | 10% |
| Low | 9% |
The statistics refer to people who had a credit card balance greater than $0.
You don't have to have high credit utilization to look for a debt relief solution. There are a number of solutions for people, whether they have maxed out their credit cards or still have a significant part available.
Credit card debt - average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average credit card debt for those with a balance was $6,021. The percentage of families with credit card debt was 45%. (Note: It used 2022 data).
Unsurprisingly, the level of credit card debt among those seeking debt relief was much higher. According to November 2024 data, 88% of the debt relief seekers had a credit card balance. The average credit card balance was $15,618.
Here's a quick look at the top five states based on average credit card balance.
| State | Average credit card balance | Average # of open credit card tradelines | Average credit limit | Average Credit Utilization |
|---|---|---|---|---|
| District of Columbia | $16,967 | 7 | $24,102 | 121% |
| Arkansas | $12,989 | 9 | $28,791 | 83% |
| Tennessee | $13,822 | 9 | $27,261 | 82% |
| New Mexico | $11,860 | 8 | $25,731 | 82% |
| Kentucky | $12,834 | 8 | $26,156 | 81% |
The statistics are based on all debt relief seekers with a credit card balance over $0.
Are you starting to navigate your finances? Or planning for your retirement? These insights can help you make informed choices. They can help you work toward financial stability and security.
Regain Financial Freedom
Seeking debt relief can be the first step toward financial freedom. Are you struggling with debt? Explore options for debt relief to regain control of your finances. It doesn't matter how old you are or what your FICO score or credit utilization is. Take the first step towards a brighter financial future today.
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