Fewer Consumers in Debt, But Those Who Are Have Fallen Deeper in Debt
The good news is that fewer Americans are in debt. The bad news? Those of us with debts owe more than ever.
According to new Census Bureau data, the percentage of U.S. households with debt fell to 69 percent in 2011 from 74 percent in 2000.
However, households that did carry debt owed 40 percent more than in 2000, with the median debt load increasing to $70,000 from $50,971.
When consumers were isolated by age, those over 65 fared the worst. With a median debt of $26,000, today's seniors owe twice as much as they did a decade ago.
While the number of consumers with credit card debt hasn't grown, the percentage with other forms of unsecured debt - from medical expenses to student loans - has risen by 11 percent.
For seniors, these debts are often a result of helping children and grandchildren with school costs, job loss and housing expenses while struggling to pay their own bills, which may include an underwater mortgage.
To make matters worse, many are dealing with shrinking incomes and plummeting pensions. It's no wonder seniors are the fastest growing group of consumers filing for Chapter 7 or Chapter 13 bankruptcy.
Regardless of age, having too much debt takes a toll on your finances, your family and your emotions.
Many folks put off filing until they have no other options because they fear that by declaring bankruptcy, they'll be declaring failure. On the contrary, bankruptcy can provide consumers with a fresh start. Choosing to take action to improve your financial situation is a sign of achievement, not surrender.
Over time, growing debts lead to wrecked credit, mounting late fees and harassment from bill collectors. In a worst case scenario, you can also lose your home to foreclosure and other assets to repossession.
Chapter 13 bankruptcy prevents foreclosure while making it feasible to slowly pay off debt over a period of three to five years. Chapter 7 bankruptcy can sometimes eliminate debt in just a few months.
If debts are too large for you to manage, the problem won't solve itself. The sooner you take action, the sooner you can begin to rebuild credit and your financial freedom.
Whether you hope to retire in 20 years or next year, starting with a clean financial slate ensures you'll actually get to enjoy your golden years.
If you're dealing with financial difficulties, our bankruptcy attorneys can help you determine if bankruptcy could provide the financial relief you deserve. Call DebtStoppers today at 800-440-7235 to sign up for your complimentary personal debt analysis courtesy of a professional bankruptcy lawyer. The only thing you have to lose is your debt.
More Blog Entries:
Forgiven But Not Forgotten: IRS Considers Forgiven Debt As Taxable Income: March 18, 2013
Without Good Debts, More Young Consumers Unable to Get Loans: March 4, 2013
Resources:
More Americans Debt-Free, But The Rest Owe More, by Tim Mullaney, USA Today