Consumer debt in America rose in the fourth quarter of 2012 by 0.3% to $11.34 trillion dollars.
This data shows a few important trends. First, the recent increase in consumer debt represents a break in the steady decrease in debt since the height of the recession in Q4 of 2008. This increase is mostly attributed to a rise in non-housing debt, which could mean credit card debt, bank loans, student loans, or home equity lines of credit account for the increase.
Second, home equity lines of credit (HELOC) delinquencies saw a significant decrease in Q4 of 2012, but only because of the high rate of “charge offs” of delinquent HELOCs. A charge off is when the bank declares the debt will most likely not be collected, and the designation allows the bank to claim a tax exemption on that debt. This does not mean the debt is no longer valid, quite the contrary. The bank still has the right to collect the debt, or the bank may sell the debt to the debt collector who purchases the rights to collect the debt.
In summation, American consumer debt has again risen and these debts are not going anywhere until consumers take action to eliminate their debt. A debt settlement attorney can help eliminate this debt for good by negotiating with a creditor for a reduction in the principal balance owed. Contact a debt settlement attorney and learn how you can break America’s debt trend.
Kevin Fallon McCarthy
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