Consumers 'desperate' about debt

The holiday shopping season has just begun, and an alarming number of consumers already are struggling with unmanageable debt.

Debt Settlement USA, a Scottsdale-based company that negotiates with creditors and financial institutions on behalf of consumers, reported Friday that its Consumer Debt Index stood at 13.55 for the third quarter, up more than 6.5 percent from the second quarter and nearly 30 percent from the third quarter of last year.

The index was developed by the company to measure key economic factors that are most severely affecting Americans who face an increasing burden of credit card, car payment, mortgage and other consumer debt. It is compiled from the Consumer Price Index, consumer credit reports from the Federal Reserve, the mortgage delinquency rate and the consumer loan delinquency rate.

"As the upheaval in the American economy continues, more and more Americans are becoming desperate to find a solution to help them get out of debt," Jack Craven, president of Debt Settlement USA, said in a statement. "The current economic crisis and America's addiction to credit has created a perfect storm in which consumer credit delinquencies will be the next crisis to hit the economy."

The third-quarter increase in the index was driven mostly by the mortgage delinquency rate, which is up 15.78 percent from the previous quarter and nearly 87 percent from the same quarter last year, according to the company.

Also, the rate of consumer loans more than 30 days past due was up nearly 3.1 percent from the second quarter and more than 16 percent from a year ago.

Debt Settlement USA expects to see a 40 percent increase in the number of consumers who turn to their debt management services this year.