Funeral Debt Crisis Worsens as One-Third of Americans Now Borrow for End-of-Life Expenses

American families are facing a growing financial crisis as funeral costs force increasing numbers to take on debt during times of grief. Data from the annual Death and Debt survey by Debt.com shows the percentage of Americans incurring debt after a death has surged dramatically from 14% in 2024 to 37% in 2025, representing a substantial increase in financial vulnerability among households.

Credit cards have emerged as the most frequent funding method for these final expenses, with 59% of those who borrowed using credit cards to cover funeral-related costs. Personal loans were the second most common option at 38%, while 22% turned to funeral-specific financing. The survey of 1,000 Americans reveals that nearly 3 in 5 (57%) say they could not afford a loved one's funeral costs today without incurring debt, highlighting the widespread nature of this financial challenge.

Howard Dvorkin, CPA and Chairman of Debt.com, explains the difficult choices families face. "Funeral costs have become a new financial crisis. Families want to honor their loved ones, but too often, compassion outweighs affordability — and credit becomes the only way to say a final goodbye." This sentiment reflects the emotional and financial pressures that converge during end-of-life planning.

The financial repercussions extend well beyond the funeral service itself, creating long-term burdens for grieving families. Over one-third (36%) of Americans reported they would delay paying other essential bills such as rent, credit cards, or utilities to cover funeral costs. Following services, 25% reported feeling anxious due to funeral-related debt, 19% struggle to keep up with payments, and 17% had already postponed other bills to manage this debt.

The survey data shows Americans are taking on increasingly larger amounts of debt for funeral expenses. Those borrowing less than $1,000 increased from 6% in 2024 to 13% in 2025, while those taking on $1,000 to $5,000 jumped from 6% to 17%. Most concerning, the percentage of Americans borrowing more than $5,000 for funeral expenses more than tripled from 2% in 2024 to 7% in 2025.

Generation analysis reveals distinct patterns in how different age groups handle end-of-life expenses. Generation X, the generation balancing both children and aging parents, carries the most debt from loss and is most likely to have taken on debt after a loved one's death. Gen X most often turned to credit cards to cover funeral expenses, while Millennials leaned on personal loans more than other age groups. Baby Boomers outpaced other generations in using funeral loans but were the least likely to take on debt overall.

The survey uncovered concerning gaps in financial preparedness, with half of all Americans not having discussed how their debt or funeral expenses will be handled. While knowledge about what happens to someone's debt after they die remains higher than in 2023, it has decreased from 61% in 2024 to 55% in 2025. For more insights and information visit https://www.debt.com.

This growing funeral debt crisis represents a significant shift in American financial vulnerability, affecting not only immediate family budgets but also long-term financial stability. The data suggests that as funeral costs continue to rise and emergency savings remain insufficient for many households, more families will face the difficult choice between honoring loved ones appropriately and maintaining their financial health.