More women struggling with debt during the recession, CareOne research finds

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More women struggling with debt during the recession, CareOne research finds

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It's no secret that the Great Recession has impacted families in new and different ways. For the first time, many families are facing a loss of income-- in many cases for months at a time. As of July, the U.S. Department of Labor estimated that 6.6 million people were long-term unemployed --those out of work for at least 27 weeks -- compared to June 2008, when the figure was only 1.7 million.

A loss of income for such an extended period of time has left families and individuals alike looking for new ways to cover basic living expenses, with a growing number of people turning to credit cards to pay for basic necessities like groceries, utilities, and healthcare.

Lately, there has been a lot of media attention on unscrupulous debt relief providers, and CareOne's research shows just how important it is to have services from legitimate companies available to all. This recession has left many people in a financial situation they just weren't ready for and we are seeing them reach out for help in record numbers.

As one of the nation's largest networks of debt relief providers, it is important for us at CareOne to have a solid understanding of how the recession has impacted the amount of debt families have. Since about two-thirds of our customers are women, we focused our research there. (See full results here in our report, "Women, Debt and the Recession: A Snapshot of the Changing Face of Debt in America from CareOne Debt Relief Services.")

To better serve those affected by debt, we used our extensive customer database to analyze every aspect of our clients - from their marital status to their family income and the amount of debt they had. (The study was done blindly and all individual client records were kept confidential.) We compared two different time periods - from October 2007 through March 2008 and October 2009 through March 2010 - to see how the recession had changed things.

We knew we had more customers - about twice as many - but what surprised us was learning how our customers have changed.  For example, we found that 45 percent of the women seeking debt relief assistance had more than $50,000 in debt - up from 33 percent of women at the start of the recession. At the same time, we have seen a decline in the number of women with less than $15,000 in debt.

Perhaps even more surprising is that women from upper income households (annual income over $60,000) are seeking assistance in greater numbers than two years ago. Women who are divorced and widowed are also reaching out for help at a much greater rate.

While some economists say the recession has officially ended, one look at the news tells us recovery is slow and that many families are still hurting. Unemployment levels remain high, as companies are still hesitant to hire. Homes are being foreclosed on at a record pace, as families struggle to make their mortgage payments. While consumer spending is sluggish, people are still willing to paying for items they deem essential, especially as a new school year begins and we gear up for the often-costly holiday season. Therefore, it is unlikely we will see the trends uncovered by our research easing anytime soon, even as being frugal has become chic. As hard as it can be to ask for help, especially when money is involved, our research shows a growing number of people, from all walks of life, are finding it to be the best, and often only, solution. 

Jenny Realo

Jenny Realo is the Chief Product Officer for CareOne Services, Inc. She is also a contributing writer to the Straight Talk on Debt blog. From her experience working in the finance industry for over 21 years she provides readers a unique inside perspective on how to protect their rights and manage their debt.

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  • I'm 68, widowed, fixed SSA income and have over $10,000 in credit card debt. Having difficulty making the high min payments.

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