Non-mortgage consumer debt reached $2.1 trillion in 2004, the Federal Reserve reported recently. That's $17,530 per household, up from $16,035 the previous year. The average car loan financed in 2004 was $24,888, for a length of five years. As debt increases, so does bad debt. When an individual's debt to income rises over 25-30%, the likelihood of stepping into insurmountable circumstances is inevitable. Many have theories from skyrocketing credit card approvals to societal trends. No matter which reason, it is now more important for a property manager to recover debts because competition and home ownership make rental profits that much more elusive.

"The problem is, people don't realize that credit cards are just plastic cash," says Chris Bender, Communications Manager for the National Foundation for Credit Counseling in the U.S.. "They think when they pay with credit cards they don't have to pay for it quickly, and so they don't keep track of what they spend. When you hand someone cash, it's a psychological wake-up. 'Why, I just gave away $40.' When you charge something, you don't see the money go, and in your mind that makes a difference."

The most alarming statistic: the average American carries approximately $8,400 in credit card debt. Making a minimum payment of 2 percent per month, it would take almost 31 years to pay an $8,000 balance on a card charging a 13 percent annual percentage rate. $9,100 in interest .

Property Managers have to qualify every applicant with thorough background check and income verification. Even the most comprehensive checks cannot guarantee that 100% of residents will complete their rental agreements. In the rental industry, bad debts are inevitable and recovering this debt is essential.

Landlord2Landlord has a National Bad Debt Recovery Program which allows property managers to track bad debt collections accounts with an online collections log.

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