Milwaukee, WI Bankruptcy Law Blog

Monday, February 26, 2018

Are Americans in Debt?

Americans Are More In Debt Than Ever 

It’s been ten years since the 2008 financial crisis and the start of the Great Recession. Although many people vowed never to go so far in debt again, new data on household debt shows that American households have more debt now than before the financial crisis. Does this mean financial ruin is once again inevitable? 
According to the Federal Reserve Bank of New York’s Center for Microeconomic Data, total household debt increased by $193 billion or 1.5% to $13.15 trillion in the fourth quarter of 2017. This marks the fifth consecutive year growth in household debt. We are now more in debt than we were before the 2008 financial crisis. 
At the macro level, the increase in the amount of debt held by consumers is a good thing. It means that people are generally hopeful about the future and willing to take risks. It is also a sign that banks and other lenders also feel good about the economy and are willing to lend to people. Few people would be able to purchases things like houses or cars, start new businesses, or better themselves by getting an education without taking on some debt. Because of this, debt is a measure of how optimistic the average person is about the future and their ability to pay off their debts. 
On the individual level is where things get dicey. According to the Fed’s data, approximately $619 billion of the $13.15 trillion in debt that American families hold is delinquent. Of the $619 billion that is delinquent, $406 billion is seriously delinquent, which the Fed defines as at least 90 days late.
Some people are going to face hardships that limit their ability to pay back the debt they owe, forcing them to file for bankruptcy. If that person is you, there is no reason to feel ashamed. The economy is still pretty volatile, and it’s not like you planned to make things difficult on purpose. Stuff happened and you did the best you could. 
If you don’t think you are going to be able to get your financial life back under control, don’t hesitate to talk to a bankruptcy attorney. An experienced bankruptcy attorney can explain what your options are, and help you make the right choices for you and your family.

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| Phone: 414-436-8428