Counseling Debt Reduction

Consumer debt is a term that can have slightly different meanings depending on the context. Typically, consumer debt refers to any debt that is taken on by an individual as opposed to a business. For it to be business debt, the borrower must be the business. Only the most established businesses qualify for credit, so quite often the borrower is an individual even though the purpose of the loan may be business-related. Technically, this would still be consumer debt.

Sometimes, depending on the context, mortgage debt will be considered separate from consumer debt. In the technical sense, mortgage debt is still consumer debt.

To answer your individual questions:
1. Yes, a personal line of credit is considered consumer debt if you owe a balance on the line of credit.
2. A consolidation loan is considered consumer debt.
3. If you purchase something for a business purpose, but you have to finance it as an individual, then it’s still consumer debt.
4. In the general sense, yes, consumer debt is personal debt with the possible exception of mortgage debt.