Americans Still Struggling to Pay Off Debt, Says New Study
The economy may be on the upswing, but consumer finances are still down in the dumps.
In a recent survey by Bankrate.com, 36 percent of Americans reported that their top financial priority is simply to stay current or get caught up on bills. For 20 percent, the main goal is to pay off overwhelming debts like credit card debt and student loans.
So if the economy is improving, why are Americans stuck with the same old debt problems?
Even though unemployment is down and new jobs are being added, it’s too soon to see a positive effect on income. In fact, for most people, incomes have dropped.
When you’re hired after a layoff, it’s likely that your new job will pay less – or, at the very least, the same – as your former position. Along with that smaller paycheck, you may also be struggling with debts accumulated when you didn’t have any income at all.
Even those of us who managed to hold onto a job during the turbulent last few years may have experienced reduced hours, furloughs and other paycheck-trimming factors. New Census data shows that the median American family earns an income 8 percent lower than in 2007, before the official start of the recession.
It makes sense that, with less money in our pockets, paying bills has become a challenge. The truth is most of us are stuck paying for a lifestyle that, just several years ago, we thought we could afford. Now that our incomes can no longer support that level of spending, we’re stuck with the fallout.
For many folks, getting rid of debt is the only way to stop living paycheck-to-paycheck and start living within our means – and without the hassles of bill collectors, late payment fees and outrageous interest rates.
Perhaps the worst thing about debt is how it interferes with saving. One of the keys to improving your financial situation – and avoiding future debts – is to save money from each paycheck. But it can be tempting to throw any extra income toward existing debt.
Wanting to pay down overwhelming debt is admirable, but having zero savings is dangerous. One setback – such as an unexpected expense or an illness that keeps you from work for a couple weeks – and your finances may never recover.
Filing for bankruptcy can help you do both – pay off debt and start saving. Bankruptcy has the power to eliminate unmanageable debt entirely and quickly. Meanwhile, it also eliminates hazards associated with debt, such as harassment by debt collectors, repossession, wage garnishment and more.
When you have debts so large you may never be able to pay them off, making the decision to file for bankruptcy is like making the decision to take back control of your finances – and your future.
If you’re behind on your mortgage, paying the minimum on credit card bills or late on car payments, you probably have more debt than you’ll be able to overcome without help. Denying your debt troubles only makes things worse, leading to more stress and struggle.
Post-recession, bankruptcy has helped millions of Americans eliminate crushing debt to find a fresh start. A DebtStoppers Chapter 7 or Chapter 13 bankruptcy plan could be your ticket to a brighter financial future.
Find out if a DebtStoppers bankruptcy plan is right for you with a complimentary one-on-one debt evaluation with a DebtStoppers bankruptcy attorney. Contact us today to discuss your options for finding financial freedom once and for all.
Resources:
Focus For Many Consumers? Just Paying the Bills, by Polyana da Costa, Bankrate.com