Credit card debt and personal loan delinquencies set new record

The American Bankers Association defines as “delinquent” any loan that has a payment more than 30 days overdue.   Credit card loans were in the worst shape, with 4.75% of all accounts, representing 6.6% of all bank card debt now delinquent.  This is a new record.

Personal loan delinquencies were also rising rapidly, increasing to 3.47 percent from 2.88 percent.

This trend is expected to continue until rapidly increasing unemployment rates finally turn around.

Unlike mortgage debt or an auto loan, credit card debt and personal loans are “unsecured.”  This means that if you file bankruptcy the judge can significantly reduce or eliminate the debt.   You can actually start over.   More information is in our archives: When to File for Bankruptcy.

Knowing what can happen in bankruptcy court, credit card companies have become much more willing to negotiate overdue balances.   More information is in an earlier BLOG entry: Debt Solutions coming from Credit Card Companies.

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