The Board of Governors of the Federal Reserve System announced that in July, 2012 the amount of revolving consumer debt contracted by 6.75 percent. This marks another decline in the levels of consumer debt and less demand for debt relief services.
Let’s not forget that as long as consumer debt drops, the level of debt person drops exponentially as the population grows at the same time.
What makes this situation even more interesting in the debt relief industry is that while unsecured consumer debt constricts, the total level of consumer debt owed, grows. The growth in other types of debt like student loans and secured loans puts pressure on consumers being able to take on and service unsecured consumer debt obligations.
If you look at the chart below, you can see how in 2011 the composition of debt began to really run apart. If this trend continues it is really bad news for debt relief companies that primarily service unsecured debt.
So let’s see if there is any relationship to the change of searches for debt relief options after 2011.
If we look just at the last year for consumer interest in credit counseling and bankruptcy you can see how the bump shown above at the end really ins’t that much of a positive bump at all. Instead the overall trend appears to be down.
Now search volume is just one form of measurement but it is the clearest data we can find that shows consumer interest. Unfortunately neither credit counseling nor debt settlement providers provide any industry wide numbers that can be evaluated independently.
July, 2012 Debt Levels Ugly for Debt Relief Industry. Tea Leaves Telling Story. by Steve Rhode
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