Zerohedge brings us this article on consumer debt reduction in the U.S. Americans have been up to their proverbial ears in debt, which is now on the decline. That can be a good thing or a bad thing. It is good to the extent that debt is being paid off, but that does not appear to be the major deleveraging mechanism. A large part of private debt reduction is the result of abandoned mortgages and bad credit card debt.
No mention of student loan defaults was made in the piece, but in the last year defaults have risen significantly. I have not seen a number on the amount of loans that are considered bad, where the loan was written off as uncollectable.
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