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CFPB report on debt settlements and credit counseling
The CFPB has released a report examining recent trends in debt settlement and credit counseling. The report documents changes over time in how consumers have used these debt relief options for unsecured debt.
The report shows that nearly one in thirteen consumers with a credit record had at least one account reported by the creditor as settled or with payments managed by a credit counseling agency from 2007 through 2019. It also shows debt settlements rose dramatically during the Great Recession to a peak of $11.4 billion. More than half of these settlements occurred within a year of the account first becoming delinquent. Debt settlement and credit counseling became less common after that recession, but recently settlements have been on the rise following changes in delinquencies and credit tightness.