How to calculate your qualifying unsecured debt
Your total debt and your potentially qualifying debt are not always the same number. Use this step-by-step method to estimate the unsecured balances relevant to the Debt20KPlus review.
The short answer: add your current balances for credit cards, unsecured personal loans, medical bills, and collection accounts. For this initial review, do not add mortgages, auto loans, or student loans. If the eligible balances total at least $20,000, you meet the site’s debt-amount threshold. That does not guarantee acceptance into any program.
What “unsecured debt” means
Unsecured debt generally is not backed by a specific asset that the creditor can repossess. Credit cards are the most familiar example. An unsecured personal loan may also fit. Medical bills and some collection accounts can be relevant because no house or vehicle directly secures the balance.
The label alone is not enough. A personal loan secured by a vehicle or savings account is different from an unsecured personal loan. Collection accounts also need to be identified by the original debt type: a collected medical bill is not the same as a collected auto deficiency or student loan.
Balances to include in the initial total
| Debt type | Include? | What to check |
|---|---|---|
| Credit cards | Usually yes | Use each card’s current balance, including store cards. |
| Unsecured personal loans | Usually yes | Confirm that no home, vehicle, deposit, or other asset secures the loan. |
| Medical bills | Usually yes | Include balances owed directly or assigned to collection. |
| Collection accounts | Depends | Identify the original account and avoid counting it twice. |
Balances not counted in this review
Mortgages and auto loans are secured debts. Student loans have separate federal or private repayment rules and are not part of this qualification calculation. These balances can matter enormously to your household budget, but they do not make you eligible for a program focused on qualifying unsecured debt.
A five-step calculation
- Gather current statements. Use recent online balances or monthly statements instead of memory or original loan amounts.
- List every account once. Write down the creditor, debt type, current balance, interest rate, minimum payment, and whether the account is current or past due.
- Separate secured and excluded debts. Put mortgages, auto loans, student loans, and any other asset-backed accounts in a separate budget list.
- Check collection accounts for duplicates. If a credit-card balance was sold to a collector, do not count both the original account and the collection as two debts.
- Add only the potentially qualifying balances. Compare that subtotal—not your overall household debt—to the $20,000 starting threshold.
Why the exact number matters
A precise subtotal helps you compare options honestly. Someone with $21,000 in eligible balances and steady surplus income may evaluate an accelerated repayment plan or nonprofit debt-management plan differently from someone facing missed payments, unstable income, or legal action. The number is a screening input, not a recommendation by itself.
Before enrolling with any debt-relief company, the Consumer Financial Protection Bureau recommends understanding fees, timing, risks, and whether creditors are required to participate. They are not required to accept a settlement. Interest, late fees, collection calls, lawsuits, and credit damage may continue while money is being saved for offers.
What to prepare for a consultation
- A recent balance and minimum payment for each unsecured account
- Whether each account is current, late, charged off, or in collection
- Monthly take-home income and essential living expenses
- Any summons, garnishment notice, or deadline requiring prompt legal advice
- Questions about fees, creditor participation, tax consequences, and cancellation
If you cannot make a payment, consider contacting the card issuer promptly. The CFPB notes that you do not need to be behind before asking an issuer for help. A nonprofit credit counselor may also help review a budget and possible debt-management plan.
Frequently asked questions
Can several smaller debts add up to $20,000?
Yes. The threshold is based on the combined total of potentially qualifying unsecured accounts, not one single $20,000 account.
Does past-due status change what I add?
Use the current amount owed whether an eligible account is current or past due. Status can affect available options, but it does not justify counting the same debt twice.
Does reaching $20,000 guarantee qualification?
No. It only meets this site’s initial balance threshold. State availability, debt ownership, account status, income, hardship, creditor policies, and a provider’s criteria can affect the final outcome.