Debt Settlement Calculator 2025 – Free Debt Relief Estimator
Estimate your debt settlement savings for 2025 with our free tool. Calculate potential forgiveness for credit card, medical, or personal loan debt in the U.S. Includes settlement fees, PDF/CSV export, and state-specific tips.
Enter your details below to get started. For professional advice, consult Debt.org. Explore our Debt Payoff Calculator or Student Loan Forgiveness Estimator for more financial tools.
Estimate Your Debt Settlement
Input your debt amount, type, missed payments, and income to estimate potential settlement savings. Results are estimates—verify with a debt relief professional.
How Debt Settlement Works
Debt settlement involves negotiating with creditors to reduce your unsecured debt (e.g., credit cards, medical bills) in exchange for a lump-sum payment. Settlement programs typically reduce debt by 30–50%, but fees (15–25%) and credit score impacts apply.
- Negotiation: Creditors agree to accept less than the owed amount.
- Fees: Settlement companies charge 15–25% of the debt amount.
- Risks: May lower credit score and trigger taxable income on forgiven debt.
Learn more at Debt.org or NerdWallet.
Example Scenarios
Credit Card: $15,000 debt, 4 missed payments, $2,500 income = ~$7,500 settled, $7,500 forgiven, ~$2,250 fees.
Medical Debt: $20,000 debt, 6 missed payments, $2,000 income = ~$9,000 settled, $11,000 forgiven, ~$3,000 fees.
Debt Statistics by State – 2025
Unsecured debt levels vary by state. Below are 2025 estimates for key U.S. states (based on 2024 Experian data). Check Debt.org for details.
California
- Average Credit Card Debt: $10,496.
- Tip: Negotiate medical debt settlements directly with providers.
- Example: $12,000 credit card debt, 5 missed payments = ~$6,000 settled.
Texas
- Average Credit Card Debt: $9,852.
- Tip: Work with nonprofit agencies for low-cost settlements.
- Example: $10,000 medical debt, 6 missed payments = ~$4,500 settled.
Florida
- Average Credit Card Debt: $9,614.
- Tip: Avoid for-profit settlement scams; verify with CFPB.
- Example: $8,000 personal loan, 4 missed payments = ~$4,000 settled.
New York
- Average Credit Card Debt: $10,132.
- Tip: Explore hardship programs for credit card debt.
- Example: $15,000 credit card debt, 5 missed payments = ~$7,500 settled.
Illinois
- Average Credit Card Debt: $9,376.
- Tip: Combine settlement with consolidation for faster relief.
- Example: $10,000 medical debt, 3 missed payments = ~$5,500 settled.
Debt Relief Alternatives
Besides settlement, consider these options:
- Debt Consolidation: Combine debts into a lower-rate loan. See NerdWallet.
- Debt Management Plans: Work with nonprofit agencies to reduce interest rates.
- Bankruptcy: Last resort for unmanageable debt; consult Debt.org.
Settlement Risks
Settlements can lower your credit score by 100–150 points and forgiven debt may be taxable. Always consult a professional before proceeding.
Frequently Asked Questions About Debt Settlement
How does debt settlement work in 2025?
Creditors agree to accept a reduced amount, typically 30–50% of the debt, via negotiation. Fees (15–25%) apply. See Debt.org.
Is debt settlement worth it?
It can save 30–50% on debt but may hurt your credit score and incur taxes. Compare with consolidation at NerdWallet.
Can I settle medical debt?
Yes, medical debt is often negotiable, especially after missed payments. Savings may reach 50%. Check CFPB.
How to avoid debt settlement scams?
Beware of high fees or guaranteed results. Use trusted tools like ClaimRadarUSA and verify with Debt.org.
Explore More Financial Tools
Manage your finances with our other free tools:
- Debt Payoff Calculator: Plan debt repayment timelines.
- Student Loan Forgiveness Estimator: Check loan forgiveness eligibility.
- Loan Amortization Calculator: Create loan repayment schedules.