Today, credit is something that most people have. Many people carry thousands of dollars in debt on their credit cards. In total, the United States population owes $14 trillion between mortgages, credit cards, student loans and auto loans.
Debts rose by around .7% in the third quarter of 2019, according to a report from the Federal Reserve. This debt increase isn’t necessarily bad, because it indicates that there is low unemployment and confidence among consumers. The problem is that this heavy debt could come back to haunt people if they are in over their heads and unable to make their payments due to unexpected circumstances.
What makes up most of the debt in America?
The majority of debt in America is a result of Americans taking out mortgages. Those mortgages cost a whopping $9.44 trillion, which is $31 billion more than in the second quarter of the year. Credit card balances reportedly rose by around $13 billion, and student loan costs went up another $1.5 trillion.
Borrowing and spending supports the U.S. economy, but it can become a major burden if a recession hits and unemployment becomes more common. Fortunately, it’s actually business debts that are at an historic high, while household borrowing has dropped lower and is gradually declining.
How much of a family’s income is going to its debts?
The ratio of gross domestic profits to household debt is at around 76%, meaning that about three-fourths of a family’s income is being paid out to the debts they owe. That’s actually an improvement, because during the recession in 2009, that reached nearly 100%.
Easily accessing credit is increasing the debt load
Today, it may be easier to get credit than it has been in the past few years. Lower interest rates have encouraged people to take out mortages, for example. This does mean that the amount of people struggling with debt could be much higher if another recession hits, which is always a concern. Fortunately, fewer people in America have been forced to turn to bankruptcy, though around 186,000 people still had to go through bankruptcy in the third quarter of 2019.
If you’re struggling with your debt, don’t wait to get help
If you’re struggling with debt, you don’t have to wait to get help. Your attorney can start working with you right away to limit the damage to your credit and to help you rebuild a secure financial future.
“Disclaimer – Attorney Advertising. Under Federal Law, we have been designated a Debt Relief Agency and we help people file for bankruptcy relief under the Bankruptcy Code. This information is not intended as legal advice and no attorney-client relationship is created. Results may vary. Results not guaranteed. Dramatization – not actual clients in pictures and videos. Thomas C. McBride, attorney in Alexandria, LA.”