The CDI is a statistical analysis developed by Debt Settlement USA to measure key economic factors for American consumers who are suffering under an increasing burden of credit card, car payment, mortgage, and other debt. It is comprised of the Consumer Price Index (CPI), consumer credit outstandings, the mortgage delinquency rate, and the unsecured loan delinquency rate.
The second quarter rise of the CDI was driven largely by American's soaring mortgage delinquency rate and consumer loan delinquency rate, which includes non-secured loans such as credit cards. Additionally, the CPI spiked slightly after climbing steadily but mildly over the past year.
The second quarter mortgage delinquency rate of 4.33 - 99 percent higher than a year ago -experienced its largest quarterly increase since 2007. Aside from the mortgage delinquency rate, outstanding consumer credit grew by more than $31 billion in the second quarter 2008, and nearly $137 billion since 2007. The consumer loan delinquency rate also increased during that same period by 23 percent to 3.57. Energy and food prices forced the CPI, an indicator widely used to measure inflation and price changes in the U.S. economy, up by 2.2 percent during the past quarter and 4.3 percent in the past year.
"American consumers continue to suffer under a stagnant economy, slumping housing market, and higher energy and food prices," said Jack Craven, President of Debt Settlement USA. "The Consumer Debt Index gives an accurate snapshot of the challenges facing consumers as they struggle to make ends meet while also trying to stay out of debt. As the numbers in the most recent CDI show, it is getting harder and harder for many Americans to financially keep their heads above water."
The pressure of increased debt is already being felt in the economy. As consumer debt mounts, Americans will seek solutions to help them deal with their increased indebtedness. Debt Settlement USA expects to see a 40 percent increase in the number of consumers in 2008 that turn to debt settlement as the best solution to help them deal with financial hardship. Legitimate debt settlement companies can help people avoid bankruptcy and get out of debt efficiently and expeditiously by negotiating a settlement for a portion of the debt with their creditors.
Debt Settlement USA emphasizes the critical need to establish standards within the debt settlement industry now in order to protect consumers from fraudulent and unethical debt settlement practices. According to Debt Settlement USA, consumers and creditors should review the practices of debt settlement companies prior to entering a debt settlement agreement.
