Growing Consumer Debt Requires Reliable Credit Counseling

Despite what Federal Reserve Chairman Alan Greenspan says, there is a credit crisis in this country. But by that I don't mean people can't get credit.

The opposite is true, and that's the problem. Consumer debt is at an all-time high, notes Susan C. Keating, the new chief executive of the Maryland-based National Foundation for Credit Counseling (NFCC), the nation's largest organization of nonprofit credit-counseling agencies.

Keating is in a better position than Greenspan to know how bad off many consumers are. After all, the credit agencies that are part of the NFCC are on the front lines, working with people overwhelmed with debt.

Oh, but Greenspan says everything is just peachy.

"Overall, the household sector seems to be in good shape," he said in a recent speech to the Credit Union National Association.

Good shape?

Only if you think the debt-related obesity that consumers are suffering from is just baby fat.

Consider these facts:

• According to the Federal Reserve, last year U.S. consumer debt topped $2 trillion for the first time.

• Consumer bankruptcies continue to rise. Personal bankruptcies for 2003 rose to 1.63 million, up 5.6 percent from a year earlier. And, according to bankruptcy researchers Elizabeth Warren and Amelia Warren Tyagi, authors of "The Two-Income Trap," for every family that officially declares bankruptcy, there are seven more whose debt loads suggest that they ought to.

• The average household credit card debt is $9,200, according to CardWeb.com

• Each year, almost 9 million consumers seek help from debt-counseling services.