Debt Collection Agencies, Creditor Contact One Third of Consumers Over Late Payments

COLUMBIA, MD – For many Americans, severe debt is a fact of life, one that is likely to be exacerbated by increasing interest rates. Survey results released today by Amerix, a provider of back-office processing and technology services for credit counseling agencies, show that while only 11 percent of consumers admit to being behind on their payments, 35 percent say they are contacted by creditors at least once a year regarding outstanding debt. Yet, despite being contacted by their creditors, only 9 percent of Americans have sought help from consumer credit counseling firms.

The survey findings were released on the eve on an important legislative debate over the Consumer Debt Counseling Act (CDCA) at the National Conference of Commissioners on Uniform State Laws (NCCUSL). NCCUSL members will determine whether the CDCA should limit debt counseling services to organizations with non-profit status. Such a move would eliminate a wide array of services available to residents of 26 states where for-profit debt counseling firms can operate today. It would also limit choices of all consumers nationwide who are looking to solve their debt problems. The decision made at this meeting could become a nationwide law over the next several years.

“Millions of Americans are living paycheck to paycheck. Many are afraid to face their growing debt problem. Others assume that they will not be able to pay debt down and do not take the necessary steps to address their debt issues,” said Kathleen Gurney, Ph. D. and CEO of the Financial Psychology Corporation. “Getting out of debt is never an easy process. But with the proper tools, and by changing the relationship individuals have with their money, it is within the reach of all Americans.”

According to the Amerix study, 63 percent of Americans carry unsecured consumer debt, and 15 percent are more than $15,000 in debt. Furthermore, only 21 percent of 25-55 year-olds are debt-free, compared with 49 percent of adults 65 and older.

“Over the past several years, the United States has experienced unprecedented low interest rates. For many homeowners, these low interest rates could have provided an excellent opportunity to refinance their home and pay down their debt, yet only 10 percent of people took advantage of low interest rates to do so,” said Michael Croxson, President of Amerix. “This is one example of how debt counselors can provide the guidance and assistance needed to help consumers with their debt problem, but as our survey shows, Americans are not owning up to the depth of debt issues.”

Additional important survey findings include: More than half of those with consumer debt (54 percent) concede that various obstacles are preventing them from taking action to reduce their debt, with 38 percent claiming they don’t feel their debt is a problem yet. Other obstacles consumers cited were: paying the monthly minimum and the debt not being reduced, being unsure of what to do or being overwhelmed by debt, and being unable to stop spending. Asked where they would go for advice about managing their consumer debt, most consumers trusted family members for advice (33 percent), while 32 percent would go to a financial planner. Approximately 30 percent of consumers would consider credit counseling agencies.

About Amerix, Corp.
Founded in 1997, Amerix provides technology, processing, and technology support to accredited credit counseling agencies that serve nearly 300,000 active clients. Since its inception, Amerix technology has enabled accredited, nonprofit credit counseling agencies to assist nearly one million people by structuring payment plans to help these clients get back on their feet. Amerix is headquartered in Columbia, Md.