Experts Predict Rise in Credit Card Delinquencies, Bankruptcies

Debt Shield executives are alerting consumers to recent studies, banking reports and expert predictions that show the number of credit card delinquencies and charge-offs rising in 2007 and the number of bankruptcies quadrupling by 2008.

A worsening economic environment for consumers that includes rising energy prices, unemployment and debt levels will create an increase in credit card delinquencies according to a study by Bernstein Research. Several financial experts, including executives at Morgan Stanley and Fifth Third Bancorp Low, predict a decline in consumer credit quality next year. A survey conducted by Collections & Credit Risk Magazine found that charge-offs rose in the third quarter of 2006 for 7 of the 15 credit card issuers they surveyed.

A survey by the National Association of Consumer Bankruptcy Attorneys (NACBA) shows bankruptcy rates on the rise and may be back to their pre-reform levels in another year. Their survey also found that the majority of filers turn to bankruptcy due to major financial hardships, such as job loss or medical expenses, and only 8.1 percent filed for bankruptcy because of “wasteful spending.”

“All of these studies suggest that our economy is heading in the wrong direction,” said Steve Carrier, president of Debt Shield. “Most consumers are forced into filing bankruptcy or into massive credit card debt just to cover basic living expenses or pay for emergencies or other situations outside their control.”

Carrier said that financial education and responsible decision making can help consumers, but many people cannot escape from debt without some outside help.

“The data demonstrates the importance of debt settlement for consumers and creditors,” explained Carrier. “Debt reduction settlements provide a way for consumers to repay debts based on financial ability and a way for creditors to recover funds that would otherwise be lost in bankruptcy.”

About Debt Shield:

Debt Shield, Inc., is a debt settlement company dedicated to helping consumers resolve their unsecured debt through mutually agreeable and discounted lump sum settlements in consideration of legitimate financial hardships. By helping consumers avoid bankruptcy, Debt Shield provides a service for both debtors and creditors. For more information about Debt Shield, call 1-888-397-7546 or visit the website at www.debtshield.com.