There will be times in your life when you will be short of funds. You may be unemployed or have a personal disaster that has left your bank account empty and bill collectors pounding on your door. You need to find a way to get out of debt. Bankruptcy should be your last resort, and this blog post will help show you how to avoid bankruptcy.
No matter how careful you are with your finances, debt happens. There are big debts that are worth taking on such as student loan debt to get a college degree or a mortgage to buy your own home. There are other types of debt that should be avoided if possible, such as credit card debt. The trick is to not let the debt become overwhelming so you don’t become part of the 26% of Americans who are struggling to pay their monthly bills. That’s why many people try debt consolidation.
American debt has reached another all-time high. According to the Federal Reserve, household debt has exceeded $4 trillion. Much of that increase is due to rising student loan balances and auto financing, which contributed $80 billion in 2018. Overall, consumers are spending about 10% of their disposable income on non-mortgage debt. Credit card debt is a big part of that, and Experian reports that the average credit card balance is more than $6,000. In fact, one in three consumers fear they will max out their credit card debt.
We all hate debt, but Americans today are carrying more household debt than ever before. By the second quarter of 2018, American household debt had exceeded $13.2 trillion, and debt levels are 21.4% higher than the total household debt following the 2013 financial crisis. At the same time, wages are stagnant—and they did not grow at all between June 2017 and June 2018. More households are struggling to pay their bills, and more Americans are seeking new strategies for debt consolidation.