Majority of College Students are Current on Credit Card Bills

Equifax finds college students with credit cards are paying their full balances each month, some with assistance from their parents. A majority of college students have one or more credit cards and pay off their balances each month, according to a new survey from Equifax. Nearly 70 percent of the students surveyed have one or more credit cards, and 72 percent said they pay their balances in full each month, Equifax reports in a news release on the survey. The survey includes more than 600 college students between the ages of 18 and 24, known as “Generation Z.”

A majority of the survey respondents with credit cards use them for different purchases, while 16 percent said they save their credit cards for use during an emergency. Eighteen percent of respondents who regularly use their credit cards said their parents pay their balances each month, and 59 percent who are not keeping up with their monthly payments said they plan to do so within a year, according to the news release. More info here http://bit.ly/2ceoCFd

Debt collection companies continue to handle a majority of complaints in a timely manner

Year-to-date debt collection complaints to the Consumer Financial Protection Bureau are down 10.9 percent as of July 2016, and monthly complaints declined as well. Year-to-date debt collection complaints compared to this time last year declined from 24,753 in July 2015 to 22,062 in July 2016. Complaints in July 2016 compared to July 2015 decreased by 28.3 percent from 3,832 to 2,747. Complaints to the CFPB typically fluctuate as more data come in, but WebRecon CEO Jack Gordon estimates the year-to-date complaints should still be about 10 percent less than this time in 2015, according to his summary of the report. More info here http://bit.ly/2bjv89p

Credit Card Balances Influence Increase in Household Debt

The Federal Reserve Bank of New York’s latest Household Debt and Credit report shows credit card debt is increasing while overall credit card use and delinquency rates decline. Household debt increased in the second quarter 2016, primarily due to a rise in auto loan and credit card debt as of June 30. Overall household debt increased by $35 billion to $12.29 trillion in the second quarter. Total household debt remains at 3.1 percent below its peak of $12.68 trillion in third quarter 2008, but it is 10.2 percent above reports from second quarter 2013.

Credit card debt increased $17 billion to $729 billion; however it is still lagging behind the high of $866 billion reached in the fourth quarter of 2008, according to a blog post by the Fed accompanying the report. While credit card balances increased, credit card delinquency rates improved to 7.2 percent in the second quarter compared to 7.6 percent in the first quarter. More info here: http://nyfed.org/2bjo8tl

Total Bankruptcy Filings Decline in July

Despite the overall decline, commercial filings continue to increase, according to the American Bankruptcy Institute.

Total bankruptcy filings declined in July compared to July 2015 as well as to figures in June this year, according to a news release from the American Bankruptcy Institute and data provided by Epiq Systems, Inc.
The total bankruptcy filings declined 15 percent to 61,308 in July this year, compared to 71,875 in July 2015. There were 53,386 consumer filings in July, a 16 percent from 69,214 in July 2015.
Total commercial bankruptcy filings, however, increased 10 percent to 2,922 in July 2016 compared to 2,661 in July 2015.“July is the ninth consecutive month with a year-over-year increase in commercial filings. However, total commercial chapter 11 filings decreased in July 2016, as the 355 filings were 45 percent less than the 645 commercial chapter 11 filings registered in July 2015,” according to the news release.
“Businesses facing financial headwinds continue to turn to the financial fresh start of bankruptcy,” said ABI Executive Director Samuel J. Gerdano. “Driven by distress in the energy and retail sectors, commercial bankruptcy filings for 2016 will likely total close to 40,000.”
The American Bankruptcy Institute also reports that the average nationwide per capita bankruptcy-filing rate in July was 2.53 (total filings per 1,000 per population); a slight decrease from the filing rate of 2.56 percent recorded in the first half of this year. There were 1,978 average total filings per day in July 2016, a 15 percent decrease from 2,319 per day in July 2015.
States with the highest per capita filing rate (total filings per 1,000 population) through the first six months of 2016 include: Tennessee (5.56); Alabama (5.34); Georgia (4.62); Illinois (4.21); and Utah (4.10.)

Debt Collector May Have Violated FDCPA When It Accepted Payment on Time-Barred Debt in Chapter 13 Bankruptcy Case

The Eleventh Circuit Court of Appeals affirmed the district court’s decision that the plaintiff’s complaint failed to state a claim under either the Fair Debt Collection Practices Act or the Florida Consumer Collection Practices Act because the debt the collection agency sought to collect did not arise from a consensual “consumer” transaction but, instead, arose from the negligent conduct of the plaintiff’s sister in an automobile accident.

Debt Obligation from Tort Damages is Not a “Consumer Debt” under FDCPA

The Eleventh Circuit Court of Appeals affirmed the district court’s decision that the plaintiff’s complaint failed to state a claim under either the Fair Debt Collection Practices Act or the Florida Consumer Collection Practices Act because the debt the collection agency sought to collect did not arise from a consensual “consumer” transaction but, instead, arose from the negligent conduct of the plaintiff’s sister in an automobile accident.

Which Households Have Negative Wealth?

The Federal Reserve Bank of New York finds consumers with student loan or credit card debt, for example, have “negative wealth” compared to their assets. A share of households in the U.S. have total debt that exceeds their assets, known as “negative wealth.” Researchers from the Federal Reserve Bank of New York asked consumers about their household finances in conjunction with the Survey of Consumer Expectations in August 2015. The Survey of Consumer Finances is conducted monthly and there have been two household finance surveys to supplement it, including in August 2014. The researchers, from the Fed’s Research and Statistics Group, Senior Vice President Wilbert van der Klaauw, Senior Economist Giacomo De Giorgi, Assistant Vice President Olivier Armantier and former senior research analyst Luis Armona estimated overall that “15.1 percent of the households in the U.S. population have net wealth less than or equal to zero, while 14 percent have strictly negative wealth.” More info here.