Credit card debt for American consumers keeps skyrocketing and has now exceeded $1 trillion for the first time, according to a new study by the personal finance website WalletHub. By their estimate, consumer debt rose an additional $92.2 billion in 2017, and the average U.S. household now owes $8,600 on credit cards alone. Another source, Time.com, puts that number at $16,061 per household.
While WalletHub analysts feel that this accumulation of debt reflects Americans’ confidence in the economy, confidence can erode quickly, leaving consumers with bills they cannot pay. The credit card delinquency rate increased at the end of the third quarter of 2017, and this is a sign of increasing problems, where people are spending more than they have and fall behind on their bills.
The skilled and seasoned Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand that even the most well-intentioned people can find themselves in a financial hole. We offer a free consultation to evaluate your financial situation by looking at your debts, your income, and your goals and coming up with a debt-relief plan that’s best for you. Call one of our conveniently located office branches or email for your free consultation.
Why the Increase?
According to the Federal Reserve Bank of New York, American household debt recently reached a record of nearly $13 trillion, due to increases in mortgage, auto and credit card debt. While increased mortgage and auto debt is a natural result of people doing better in a recovering economy, it is credit card debt that is the most serious issue.
Charging on credit cards is a convenient but costly way to live. Unfortunately, too many Americans rely on their credit cards to keep pace with increased living costs. The average American has two or three credit cards and a total balance of $6,375, up nearly 3 percent from last year, according to Experian’s annual study on the state of credit and debt in America.
Those who don’t pay what they owe in a timely fashion, or pay only the minimum balance, wind up in situations where debt snowballs quickly, accumulates and never gets paid off. The average credit card interest rate is 14.87 percent and may sometimes be as high as 28 percent. As credit card delinquency rates rise, lenders tend to tighten credit by making it harder to get a credit card and eliminating bargain rates and deals.
Unfortunately, too many Americans have grown accustomed to living high through credit spending, buying expensive cars, phones, and electronic devices, eating out in expensive restaurants, and taking expensive trips. They may have to reexamine their spending habits and make major adjustments to their lifestyles if they want to avoid drowning in debt.
How Bankruptcy Can Help
If you find yourself in a situation where your debts are becoming unmanageable, you may want to consider the fresh start available by filing for bankruptcy. Bankruptcy is a legal way to have many debts forgiven and provide a fresh financial start. The most common types are Chapter 7 and Chapter 13.
Can eliminate most or all consumer and/or business debts, including credit card debts, so they no longer have to be paid. Chapter 7 bankruptcy is over in a few months, so you can begin rebuilding credit quickly. You might have to sell property to help pay off creditors, but there are Ohio bankruptcy exemptions that protect certain assetscannot be sold, including clothing, cars, equipment used for work (like tools) and household furnishings. If you do not own a great deal of property, your possessions may all be exempt, qualifying you for a “no asset” case.
Allows you to consolidate and repay some or all of your debt affordably over a three- to five-year period. If you successfully complete the court-approved payment plan, the debts covered by the plan are discharged, and you may get to keep assets such as your house and car.
While many kinds of debt are discharged through bankruptcy, be aware that unless it would be an undue hardship for you to repay them, you would still be responsible for student loans.
Contact Us and Get Help
If you find yourself unable to handle credit card or any other kind of debt, there is help available. Take the first step toward debt relief and contact us today for a free consultation.
During your consultation at Fesenmyer Cousino Weinzimmer, we will evaluate your entire financial situation and determine the best fit for your particular circumstances. We will make sure you are aware of all your options and help you decide on the path to a brighter future that makes sense in your individual case. We will walk you through the process every step of the way.
Delaying can only worsen your situation, so call the Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer at one of our conveniently located office branches or contact us online for your free consultation so we can determine what debt relief solutions will work best for you.