Debt Relief Industry Forecasts and Trends

July, 2012 Debt Levels Ugly for Debt Relief Industry. Tea Leaves Telling Story.

Written by Steve Rhode

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.

Debt Settlement

Credit Counseling

Chapter 7 Bankruptcy

Credit Counseling and Chapter 7 Bankruptcy

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.


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See also  Bankruptcy Filings Down in June 2013

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • low delinquencies are another reason lending standards are loosening.  Also, don’t forget that amount of debt outstanding figures often exclude charged-off accounts… 

  • Consumer loan delinquencies dropped to their lowest mark in nearly six years during the second quarter ended June 30 as households favored debt service over spending increases, according to the American Bankers Association.

    Delinquencies on bank card debt fell from 3.08 percent of all accounts in the first quarter to an 11-year low of 2.93 percent, and well below the 15-year average of 3.91 percent, the ABA reported in its Consumer Credit Delinquency Bulletin. The ABA defines a delinquency as a payment that is 30 days or more overdue. –

  • Normally I’d agree but this time is different. With so much pressure on households with consumer debt other than unsecured, there will be less room to take on and service that future unsecured debt. See attached.

    • Totally agree … Gov loans and judgements are not going away and as they grow verses other credit that is gonna really make it tough

  • But, remember that as debt decreases, lending standards loosen. As that continues, unfortunately, consumers will begin obtaining more credit than they need and the debt cycle will continue… 

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