PHOENIX, June 4 /PRNewswire/ -- Debt Settlement USA, a leading debt
settlement company, today launched The Consumer Debt Index, a new quarterly
statistical analysis that measures the degree to which American consumers
are suffering under an increasing burden of credit card, car payment,
mortgage, and other debt.

    In the first quarter of 2008, the Consumer Debt Index (CDI) stood at
11.76 - up an astounding 22 percent over the second quarter of 2007 when it
was 9.60. The CDI is calculated based on a combination of the Consumer
Price Index, consumer credit outstandings, mortgage delinquency rate, and
unsecured consumer loan delinquency rate.

    Since the second quarter of 2007, each CDI component has increased, and
in some cases dramatically. For example, the mortgage delinquency rate
soared by 67.7 percent and the consumer loan delinquency rate increased by
18.6 percent. The level of outstanding consumer debt rose 4 percent and the
Consumer Price Index grew from 2.08 to 2.12, or about 2 percent.

    Importantly for consumers, the increase in the CDI has continually
softened since the second quarter of 2007. It increased only 2.7 percent in
the first quarter of 2008, after increasing an average of nine percent each
quarter since the second quarter of 2007.

    "The Consumer Debt Index reflects an alarming trend for consumers who
are trying to get out of debt. Clearly, people are increasingly unable to
pay their credit card bills and mortgages," Jack Craven, President of Debt
Settlement USA, said. "It's encouraging, however, that the CDI is showing
signs of leveling off. It will be interesting to see if next quarter's CDI
shows that this softening is a continuing trend."

    While the Consumer Price Index has risen steadily since the second
quarter of 2007 due to skyrocketing gas and food prices, the increase in
mortgage and consumer loan delinquency rates has been less severe each
quarter. The mortgage delinquency rate rose only 11 percent in the first
quarter of 2008, after rising between 20 and 25 percent in the third and
fourth quarters of 2007. The consumer loan delinquency rate actually
decreased during the first quarter of 2008, after rising approximately 10
percent each quarter since the second quarter of 2007.

    As a result of this analysis, Debt Settlement USA expects to see a 40
percent increase in the number of consumers in 2008 who see debt settlement
as the best solution to help them deal with financial hardship in a
weakening economy. Legitimate debt settlement companies can help people
avoid bankruptcy and get out of debt efficiently and expeditiously by
negotiating a settlement for a portion of the debt with their creditors.

    "In this economy it's no surprise that so many people are facing a
difficult time, and for many of them, it's their first experience with this
level of fear and uncertainty," Craven said. "The trends we see in the CDI
make it clear that financial hardship is becoming a reality for an
increasing number of Americans. It is more critical than ever for solutions
such as debt settlement to be available to help people avoid bankruptcy,
get out of debt, and back on track financially."

    With the number of consumers facing financial difficulty expected to
grow in the coming months due to the weakening economy, Debt Settlement USA
emphasizes the critical need to establish standards within the debt
settlement industry now in order to protect consumers from fraudulent and
unethical debt settlement practices.

    According to Debt Settlement USA, consumers and creditors should review
the practices of debt settlement companies prior to entering a debt
settlement agreement. A legitimate debt settlement company should meet the
following guidelines:



    -- Have written policies and procedures.

    -- Be a member of the Better Business Bureau.

    -- Have comprehensive "Debt Settlement Company Certification"
       documentation similar to what creditors may require for their
       collection agencies and other vendors.

    -- Have an open door policy as to regulatory agencies and vendor
       certification for creditors.

    -- Have an in house attorney with significant credit industry compliance
       experience and a customer dispute resolution review process.

    About the Consumer Debt Index Methodology

    The CDI is calculated each quarter by adding the quarterly average of
the U.S. Department of Commerce's monthly Consumer Price Index, the Federal
Reserve's quarterly average of consumer credit outstandings, and the
Federal Reserve's quarterly mortgage delinquency and unsecured consumer
loan delinquency rates. Consumer credit outstandings reflected in the CDI
include revolving and non-revolving short or medium term credit to
individuals, excluding loans secured by real estate. The mortgage
delinquency rate reflected in the CDI is based on real estate loans
including loans secured by one to four family properties, including home
equity lines of credit. Unsecured consumer loan delinquency rates include
credit cards as well as other personal consumer loans.

    About Debt Settlement USA

    Debt Settlement USA, Inc. is the leading debt settlement company in the
United States, offering an honorable and ethical alternative to bankruptcy.
Located in Phoenix, Arizona, the company currently serves 15,000 clients,
and has settled over $100 million in balances since inception in 2003. On
average, Debt Settlement USA settles clients' debts for 45 - 55 percent of
the outstanding balances that are brought into the program within a period
of one to three years.

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