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The Consumer Credit Delinquency Bulletin issued by the American Bank Association recently reported that more people have made late payments on their consumer loans in the last quarter of 2006 than ever before.  

The ABA did a survey of 400 banks nationwide. This study found that the increase in late payments for consumer loans was 30 days or more. Also, a study of credit card accounts reported that late payments increased by over 5% for 2006!

The most likely contributing factors for the late payments were the interest rate increases imposed by the Federal Reserve as well as the high cost of gas. The result of these increased expenses has lowered the amount of the amount of money available to make repayments.

However, there is renewed hope for recovery for consumers that have become delinquent on their consumer loans. This is because the Fed has stopped raising interest rates and the gas prices have been declining.

On the contrary, there is another problem. Homeowners are hurting from the decline in home values. Also home sales are down, making the market more competitive.

Until recently, rising home values have increased wealth and had been a source of liquidity for borrowers which enabled consumers to spend out of savings.

Below is a detailed breakdown of the increase in late payments for the various types of consumer loans:
Boat loan delinquencies rose to 0.85% from 0.79%.
RV loan delinquencies rose to 0.82% from 0.76%.
Mobile home loan delinquencies rose to 4.01% from 3.37%.
Personal loan delinquencies rose to 1.90% from 1.75%.
Property improvement loan delinquencies rose to 1.52% from 1.40%.
Auto loan delinquencies rose to 2.05% from 1.90%.

Listed below are some warning signs that you are overextending your credit:
- Making only the minimum payment for credit cards and/or loans every month.
- You are always out of money.
- Payments have been late for important debts like your rent or mortgage or auto loan.
- It is taking you longer to pay-off your balances.
- You begin borrowing from one lender to pay off another.

**Check out an informative article on dealing with money issues.

Listed below are some simple solutions for gaining control of your debt:
- Contact your creditors and see if you can develop a repayment plan.
- Do not incur any more debt to your personal budget. More budgeting mistakes.
- Filing bankruptcy should be avoided because of its long-term effects, i.e. damaging your credit for seven years, hurting your ability to get approved for any type of credit, increasing interest rates.
- Consider enrolling in a debt consolidation program.

Related Reading:
Learn what you can do to prepare for a financial emergency.



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