MADISON, Wis. - In a new research brief for Filene Research Institute, Robert D. Manning, director of the Center for Consumer Financials Services at Rochester Institute of Technology, argues that many households that do not meet Consumer Credit Counseling Service qualifications either file for bankruptcy or throw in with shady debt settlement programs. The right solution, he says, is for lenders to create a responsible debt relief system.
Manning based his program, designed for households with credit card debts between $40,000 and $60,000, an algorithm that calculates consumer debt capacity and debt repayment capability, which he argues is the key to a successful debt relief system. Only a means-tested partial payment plan, Manning states, will balance the interests of all parties.
American household debt has exploded in the last two decades, from a total of less than $4 trillion in 1990 to over $13 trillion in 2008. Home mortgage debt grew from $2.5 trillion in 1990 to nearly $10.5 trillion today, and credit card debt burgeoned from $239 billion to $950 billion in the same time frame.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
