Household Debt is at Record Highs
The latest Household Debt and Credit survey results from the Federal Reserve reveal that Americans owe a record high of $1.129 trillion in credit card debt as of the fourth quarter of 2023. This marks an increase from $1.079 trillion in the third quarter of 2023, potentially due to Americans relying more on their credit cards amid inflation.
According to Experian, the average American carries $6,501 in credit card debt as of the third quarter of 2023. This figure has risen from $5,910 in 2022. Gen X holds the highest average credit card balance at $8,870, while Gen Z carries the lowest at $3,148.
Despite a steady payment trend, the delinquency rate for credit card loans from commercial banks stands at 2.98% in the third quarter of 2023. This marks an increase from 2.77% in the previous quarter. The delinquency rate has been rising since hitting a record low in the third quarter of 2021, although it remains below historical levels ¹ ² ³.
In the face of mounting debt and delinquencies, bankruptcy can offer a solution for individuals struggling to manage their finances. Bankruptcy provides an opportunity for debtors to restructure or eliminate their debts, offering a fresh start. It’s essential for individuals facing financial difficulties to explore bankruptcy options and consult with professionals to determine the best course of action for their unique situations. By understanding the bankruptcy process and its potential benefits, individuals can make informed decisions about managing their debt and achieving financial stability.
Filing for bankruptcy can have both positive and negative effects on an individual’s credit score. On the one hand, bankruptcy can remain on a credit report for up to 10 years, impacting creditworthiness. However, it can also provide an opportunity for debtors to rebuild their credit by making timely payments and demonstrating responsible financial habits.
In the end, filing for bankruptcy protection can serve as a vital tool for individuals overwhelmed by debt. By understanding the bankruptcy process and its implications, individuals can make informed decisions about managing their financial challenges and working towards a more stable financial future.
If you’re ready to talk to a skilled and compassionate bankruptcy attorney, give us a call and let us see how we can help you navigate the road to financial freedom. The consultation is free, confidential and comprehensive.