Consumer Debt Headlines 8/09

Mortgage Delinquencies

The Hope Now Alliance, comprised of counselors, mortgage companies, investors and other mortgage market participants, reported that there were more than 3 million mortgage loans 60 or more days delinquent through the end of July. Foreclosure starts were above 283,000 thousand in July, though completions totaled only 89,000, according to the data.

Auto Loan Delinquencies

The Chicago Tribune reported that the rate of late auto loan payments rose and attributed the cause to the shrinking labor market. The story also quoted an expert from TransUnion’s financial services group that average auto debt nationally decreased slightly.  The decline is believed to represent, in part, a tightening of credit, along with a reluctance among consumers to take on new debt amid the recession.

Student Loans

U.S. Education Department show that federal student borrowing for the 2008-09 academic year grew about 25 percent over the previous year.  Two-thirds of college students currently borrow to pay for college, and their average debt load is $23,186 by the time they graduate, according to an analysis of the government’s National Postsecondary Student Aid Study. The total borrowing limit for dependent undergraduates who take out federal Stafford loans—the most popular federal aid program—grew to $31,000 this past school year from $23,000.

Consumer Bankruptcy

The 119,874 consumer bankruptcy filings in August represented a 24 percent increase over last year’s monthly total, according to the American Bankruptcy Institute, relying on data from the National Bankruptcy Research Center. Although an increase over the previous year, the August 2009 consumer filings represented a 5 percent decrease from the July 2009 total of 126,434. Chapter 13 bankruptcy filings constituted 28.3 percent of all consumer cases in August, unchanged from the July rate.

If you are among the millions of people suffering a financial setback, call our offices to schedule a bankruptcy counseling or credit counseling session.  Do not rely on creditors to give you accurate information about your legal rights and options.