📅 2026 Update: Changes in Debt Management and Consumer Protection

Since the original article on the debt to equity ratio was published, there have been significant updates in consumer debt management laws and practices. These changes impact how consumers can handle debt and the protections available to them. The earlier article continues further down the page.

🏛️ California Debt Settlement Services Registration

Effective February 2025, California now requires debt settlement service providers to register with the Department of Financial Protection and Innovation (DFPI). This move enhances consumer protection by ensuring that only registered providers can operate in the state. These providers must also submit data, although specific fee structures remain unspecified.

📜 Tennessee Debt Resolution Services Act

In April 2025, Tennessee enacted the Debt Resolution Services Act, which took effect on January 1, 2026. This law mandates that companies offering debt resolution services must obtain a state license. Additionally, they cannot collect fees until they have successfully settled or modified a consumer's debt, providing an extra layer of protection against upfront costs.

🗂️ Colorado Debt Management Services Program Extension

Colorado has extended its regulation of debt management service providers through September 1, 2035. This extension ensures ongoing oversight and requires providers to keep records related to personal finance education. Furthermore, settlements between consumers and creditors must now be documented in writing, enhancing transparency.

❌ Federal Medical Debt Reporting Rule Vacated

In July 2025, a federal judge vacated the rule by the Consumer Financial Protection Bureau that aimed to ban medical debt from appearing on credit reports. This decision means medical debt can still impact credit scores, but consumers may benefit from voluntary industry changes and state laws that offer some degree of protection.

📌 Key Points

  • 🏛️ California now requires registration for debt settlement providers.
  • 📜 Tennessee prohibits upfront fees for debt resolution services.
  • 🗂️ Colorado's regulation of debt management services has been extended.
  • ❌ Medical debt can still appear on credit reports after a federal ruling.

💡 Tips for Managing Debt Effectively

It is important to review your financial situation with an experienced attorney to understand your best options.

📊 Understand Your Rights

Know your rights when dealing with debt collectors. The Fair Debt Collection Practices Act provides guidelines on how collectors can communicate with you. Familiarizing yourself with these rights can help you navigate interactions more effectively.

📝 Use Written Agreements

When settling debts, always insist on written agreements. This practice protects you by providing a clear record of the terms agreed upon with creditors or debt resolution companies.

📅 Monitor Your Credit Report

Regularly check your credit report for errors or negative marks. Under federal law, you are entitled to one free credit report each year from major credit reporting agencies. Keeping track of your credit can help you manage your debt more proactively.

🏛️ Know State Regulations

Be aware of the debt management laws in your state. States like California and Tennessee have enacted specific regulations to protect consumers, which can influence how you handle your debts.

📚 Utilize Free Resources

Explore resources offered by organizations like the National Consumer Law Center and the Consumer Financial Protection Bureau. These resources provide guidance on managing debt and understanding your rights, helping you make informed decisions.

🏆 Top Debt Management Services Ranked by User Reviews (2026)

The following services are known for helping consumers with personal loans, debt consolidation, and debt settlement. Their ratings are based on Trustpilot data verified in October 2026. Keep in mind that these scores can change over time, and star ratings may not fully reflect customer satisfaction, as unhappy customers often leave more reviews.

🥇 1. LendingClub

LendingClub has been rated 4.3. It is known for personal loans and debt consolidation services. However, some customers report experiencing high interest rates, which could impact the overall cost of borrowing.

🥈 2. SoFi

SoFi holds a score of 4.2 and is recognized for student loan refinancing and personal loans. Reviewers mention that while the service is generally effective, some have encountered slow customer service, which may delay the loan process.

🥉 3. Upstart

Upstart averages a score of 4.1. This service offers personal loans and debt consolidation options. However, similar to LendingClub, some users have reported high interest rates, which are important to consider when evaluating borrowing costs.

4️⃣ Marcus by Goldman Sachs

Marcus by Goldman Sachs has a Trustpilot score of 4.0. It is well-known for personal loans and savings accounts. Customers have noted slow customer service, which could affect the responsiveness of support during the loan process.

5️⃣ National Debt Relief

National Debt Relief has an impressive rating of 4.8. It specializes in debt settlement services and debt relief programs. However, some users have expressed concerns about high fees, which are an important factor when considering their services.

6️⃣ Freedom Debt Relief

Freedom Debt Relief scores 4.7. This company is recognized for providing debt settlement services and debt relief programs. Like National Debt Relief, some customers have reported high fees, which may impact overall satisfaction with their services.

🆓 Free Government and Nonprofit Help

Free assistance is available from organizations like the National Consumer Law Center and the Consumer Financial Protection Bureau. These resources provide valuable information on debt management and consumer rights, helping you navigate financial challenges without incurring additional costs.

🔎 Factors to Compare When Choosing Debt Services

  • 🔍 Interest Rates: Look for competitive rates that fit your financial situation.
  • 📝 Fees: Understand all associated fees before committing to a service.
  • 📞 Customer Service: Assess the quality of support provided by the service.
  • 📊 Transparency: Ensure the service offers clear terms and written agreements.

❓ Frequently Asked Questions

❓ What is the Debt Resolution Services Act?

The Debt Resolution Services Act is a Tennessee law that requires companies to obtain a license to offer debt resolution services. It also prohibits these companies from charging fees until they have successfully settled or modified a consumer's debt.

💳 How can I check my credit report?

You can check your credit report for free once a year from the three major credit reporting agencies. This allows you to monitor your credit history and spot any inaccuracies or negative marks.

📋 What should I do if a debt collector contacts me?

If a debt collector contacts you, it's important to know your rights under the Fair Debt Collection Practices Act. You can request written verification of the debt and ensure that the collector follows legal guidelines during communication.

📅 How have consumer protections changed recently?

Recent changes include California's requirement for debt settlement providers to register and the enactment of Tennessee's Debt Resolution Services Act. These laws enhance consumer protection and ensure that only licensed companies can provide these services.

📚 Where can I find free resources for managing debt?

Organizations like the National Consumer Law Center and the Consumer Financial Protection Bureau offer free resources and guidance for managing debt and understanding consumer rights.

🏛️ What does the recent federal ruling on medical debt mean for me?

The recent ruling vacated a rule that would have banned medical debt from appearing on credit reports. As a result, medical debt can still impact your credit score, but you may have protections from state laws or voluntary industry changes.

⚖️ Recent Cases Impacting Debt Management

Recent court rulings have influenced consumer protections related to debt management and reporting. Notably, the vacating of a federal rule regarding medical debt highlights ongoing challenges for consumers in managing their financial obligations.

For more details on how these rulings affect you, check out more rulings on the news page.

End of October 2026 Update





What is the Debt Equity Ratio?


The Debt equity ratio is a financial calculation that indicates the relative proportion of a shareholder’s equity and debt used to finance a company’s assets. The ratio is closely related to leveraging and reveals the general risk associated with investing in the company or the organization’s long-term sustainability assuming that profits are kept in line. 


The two components of the debt equity ratio are often taken from the corporation’s or company’s balance sheet or statement of financial position (also known as the company’s book value). That being said, the debt equity ratio may also be calculated by using the market values for both areas; this calculation is used if the company’s debt and equity are publicly traded and thus made available to the public. Additionally, a combination of book value for debt and market value for equity may be used to execute the debt equity ratio.


The Debt Equity Ratio Formula


The debt to equity ratio equals the company’s debts or liabilities divided by the assets under management. The debt equity ratio will be utilized in different ways and incorporate different forms of debts and assets; for example, sometimes only interest-bearing long-term debts are used as oppose to total liabilities in the calculation. That being said, the debt equity formula has been criticized because the increase in non-financial liabilities reduces the ratios yielding a problematic calculation. Nevertheless, the debt equity ratio is a common calculation used to evaluate the liquidity structure of a corporation.


Why is the Debt Equity Ratio Used?


The debt equity ratio is used as a fundamental calculation to reveal the liquidity of a corporation. Preferred shares can also be considered part of the debt equity ratio; when preferred shares are attributed to the calculation the ratio assumes more of a subjective feel. 


When the debt equity ratio is used to calculate a company’s financial leverage, the debt typically includes on the Long Term Debt associated with the underlying business model. Quoted ratios may even eliminate the current portion of the company’s Long Term Debt schedule. The composition of equity and debt as it pertains to its subsequent influence on the value of the corporation or business model is generally debated and described in various financial theorems. 


The debt equity ratio is used by investors and financial analysts to gauge the worthiness of a stock; it is a statistic used to evaluate the health of a corporation’s balance sheet. That being said, the majority of stock quotes will not include other forms of liabilities, including accounts payable, although some will make adjustments to incorporate or exclude items from the company’s detailed financial statements. 


These adjustments are typically realized to exclude the presence of intangible assets that would otherwise affect the formal equity of the balance sheet. As a result of this exclusion, the debt equity ratio would also be affected. 


Debt to Equity Ratio