Americans Need Debt Settlement and Debt Consolidation
Why is Debt Settlement Needed In America?
Debt settlement helps level the playing field for the regular 9 to 5 American workers who have found themselves in debt over their heads. Most of the people who use debt settlement are ethical and honest individuals who, through no fault of their own, have become debt-ridden. In many cases, the over-extension of credit is partially responsible for the debt.
The credit card industry gives out credit cards like candy. College students especially, have found themselves inundated with credit card offers, even before they have graduated and found jobs, let alone begun paying off their Student Loans.
The industry has thus far been partially unsuccessful in their attempt to create a class of lifetime debtors. The lobbying and successful passage of the industry’s new Bankruptcy legislation in 2005 was the first attempt.
Credit Card Late Pays Make Debt Settlement Easier
According to Associated Press Economics Writer Jeannine Aversa, late payments on credit card bills became more prevalent this past spring. Aversa blames high energy prices for squeezing the finances of Americans and making it more difficult to pay their bills on time.
If you are already late on credit card payments, debt settlement may be your best option for getting your life back on track.
Debt Ridden Americans Need Debt Settlement
The American Bankers Association takes a quarterly survey of consumer loans. In their latest report, the ABA cites credit card payments 30 or more days past due increased to 4.41 percent in the 2006 April to June quarter. These numbers are up from 4.40 percent of the January to March period.
James Chessen, the ABAs Chief Economist explained the increase in late payments in the second quarter: "High gas prices and Federal Reserve interest-rate hikes have left consumers with less money in their pockets. As a consequence, consumers have less money leftover to meet all their expenses, including paying back their loans."
Gasoline and other energy prices have since dropped considerably. The Fed has halted its rate-raising campaign and the central bank for the second straight meeting to hold rates at the current level. Luckily, this decision gives borrowers a bit more wiggle room.
Chessen goes on painting his rosy picture by stating "The financial squeeze may ease a bit in the third quarter as the Fed has stopped raising rates and prices at the pump are down more than 17 percent since the end of June.”
The ABAs quarterly survey is based on the data from more than 300 banks across the country. This quarterly survey further showed that for an amalgam of consumer loans, including auto and certain home equity loans, the delinquency rate climbed to 1.96% in the second quarter, which is up from 1.96 in the first quarter.
Variable Rate Loans Hurt Consumers as Housing Market Cools
The once-hot housing market has cooled off. This has important implications for both consumers and for the economy as a whole.
Over the past several years, homeowners sat back and watched their homes rise rapidly in value. Many Americans, because of what many believe to be an artificially induced rise in housing prices (in Las Vegas several years ago, home builders raised prices by nearly $100,000 for new homes, within the space of about a month) became inclined to spend and borrow against the perceived equity in their homes.
For some, the spending was simply to “keep up with the Jones’s.” For other Americans although, the borrowing and spending was in order to pay bills. Many individuals bought homes with “variable” interest rates, meaning that as the Fed raised rates, the mortgage payments went up.
ABA Warns Consumers to Manage Finances Better
"Up until now, rising home values have increased wealth, been a source of liquidity for borrowers and allowed consumers to spend out of savings," Chessen observed. "It's a different world now, and consumers will need to be more careful in managing their finances."
All the while the ABA warns Americans to handle their finances better, people are folding under the pressure of their debt. Debt Settlement and even Debt Consolidation can help the average consumer dig him or her self out of the hole he or she is currently in. Please give us a call at our toll free number and ask one of our intake specialists to explain the differences between debt consolidation and debt settlement.
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