Consumer Debt Relief

Road sign showing consumer debt and financial freedom in opposite directions

Whether we are in the grip of a slowdown or recession depends upon which expert you’re listening to. Whatever you call it, our economy has brought about the need for consumer debt relief like never before.

In these troubling times, many Americans are taking advantage of consumer debt settlement as the best option for those overwhelmed by consumer debt. With the need for consumer debt relief growing, there are thankfully some options available for those that are looking for relief, and based on the specific financial situation that someone is in, one solution may be better than the other.

What is Consumer Debt?

Also known as consumer credit, consumer debt is any debt resulting from purchases made by individuals or households as opposed to debt incurred by businesses or the government. This form of debt can have higher interest rates than other types of financing, which can make it more difficult to pay off.

Consumer debt is used to fund the purchase of goods for consumption, not those for investment. Examples of consumer debt include credit card debt, mortgage loans, auto loans, personal loans, retail credit cards, and Home Equity Lines of Credit (HELOC).

Consumer Debt Statistics

In the first quarter of 2020, the Covid-19 pandemic caused widespread economic uncertainty that led to recession-like conditions in the United States. As a result, consumer debt great by over $800 billion in 2020, bringing the total close to $15 trillion.

According to Experian, the largest growths in consumer debt occurred in student loan debt, mortgage debt, and personal loan debt. American mortgage loan debt rose to an all-time high of over $10.3 trillion, auto loan debt reached an all-time high of over $1.3 trillion, and student loan debt also reached an all-time high of nearly $1.6 trillion. On the other hand, credit card debt saw its largest annual decrease in nearly a decade, so not all forms of consumer debt were affected by the 2020 recession equally.

The average level of consumer debt held by Americans reached over $92,700 per consumer in 2020, which is comparable to the average consumer debt held in 2010, when debt levels spiked after the great recession of 2008.

Consumer Debt Relief Programs

Millions of Americans are struggling to manage their debt as their income shrinks. They may want to ask for advice, but don’t know who to consult regarding consumer debt relief. So, let’s look at legitimate solutions.

  • The first solution is to realize you need help to get out of the trap. The help could come in the form of consultation or intervention.
  • Secondly, you need to select a solution according to your financial situation. If your credit card debt is not too big, you may be able to approach bank yourself and negotiate for a discount or a repay plan.
  • If your debt is over $10,000 you should look for help from consumer debt settlement professionals. They can guide and assist you as well as undertake negotiations to reduce your liability more than 50 percent.

Legitimate solutions for consumer debt relief can be arrears settlement or liability consolidation. With the help of a reputable settlement company, you can find consumer debt relief without having to resort to bankruptcy. If you are someone that is looking for consumer debt relief options, give us a call at 1-800-527-4421 today and one of our debt relief experts will discuss your options for managing your debt with you.