Consumer Debts

Consumer debt is a general term to describe all types of debt which is acquired for the purchase of goods which are generally consumed and not secured by collateral and depreciate over time. The Federal Reserve estimates the amount of consumer debt in the United States is close to $2.5 trillion dollars which they estimate is nearly $8,100 for every person who lives in the United States. This amount does not include Secured Debt such as the value of home mortgages. Credit card debt is the most common type of consumer debt in the United States, and the United States Census Bureau estimates in 2010 there are approximately 181 million credit card holders in the United States. Car loans are also considered consumer debt because the car will depreciate over the life-time of the loan period.

Filing Bankruptcy may discharge a debtor from the obligation to repay certain types of debts, and the creditors may be legally barred from continuing their debt collection efforts which can include harassing telephone calls, personal contact and letters. The time taken to discharge the debt will vary depending on the type of bankruptcy filed. Chapter 7 Bankruptcy generally allows for the immediate discharge of debt after the time for filing a complaint has expired. Debts are not discharged under Chapter 13 Bankruptcy until the debtor completes their payments under the debt repayment schedule and the court grants the discharge.