Rising Consumer Debt Levels in 2017

Now that we have entered into a New Year, consumer advocates have begun to look back on consumer debt in 2017 and the ways in which consumers were harmed by unfair and deceptive debt collection practices. When consumers owe debts that they have difficulty repaying, they can be at risk of harmful and unlawful debt collection tactics. According to a recent report from NBC 5 Chicago, consumer credit card debt hit a new record high in 2017, and consumer debt more generally is on the rise. Will skyrocketing consumer debt levels lead to more personal bankruptcy filings and more claims under the Fair Debt Collection Practices Act (FDCPA)?
More Consumers Taking on Credit Card Debt Despite a Healthy Economy
When consumers begin taking on a significant amount of credit card debt, we might be tempted to assume that rising debt corresponds to a struggling economy more generally. However, according to the recent report, economists often link the fact that consumers are taking on more credit card debt to “growing confidence in the economy.” Yet rising credit card debt is not necessarily a good thing.
In November of 2017, consumer debt climbed by 8.8%, which was “the most in more than two years,” according to the report. Indeed, in November alone, the Federal Reserve indicated that American debt rose by $28 billion, which includes credit card debt, auto debt, and student loan debt. In total, that rising debt reached $3.83 billion in November, and a large portion of that debt was credit card debt. In 2017, credit card debt increased by more than $1 trillion, which is “the highest level on record, without adjusting for inflation.” While in some ways Americans’ willingness to put purchases on credit signals that they are confident they will be able to pay it off, such high levels of debt could end up signaling trouble for many consumers in the long run.
Are Consumers Over-Extending Themselves?
According to the report, some consumer advocates are worried that “consumers are over-extending themselves.” Since the Federal Reserve will probably raise interest rates this year, the total cost of that consumer debt will end up being higher if consumers do not pay off their balances each month. The reports on consumer debt we mentioned do not include mortgages or home equity loans, which means that many of those consumers could be struggling with home loans in addition to taking on credit card debt.
If consumers do have trouble paying these debts in the future, they could turn to bankruptcy in order to get a fresh start. At the same time, consumers could be opening themselves up to unscrupulous debt collection practices if they take on debt that they will not be able to afford in the coming months or years. While consumers do have recourse when debt collectors violate the FDCPA, that recourse assumes that consumers already have been harmed by unfair or deceptive debt collection practices.
Seek Advice from an Oak Park Consumer Protection Lawyer
If you believe you may have a claim under the FDCPA, you should discuss your situation with an Oak Park consumer protection attorney as soon as you can. Contact the Emerson Law Firm for more information.
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