In recent years, household debt in the United States has been on the rise, reaching levels not seen since the 2008 financial crisis. That amounts to a whopping average debt per person of $49,698.79.
This increase in debt, coupled with stagnant wages and a fragile economy, has led to a surge in the number of bankruptcies filed. In fact, Bankruptcy petitions across all chapters increased by 11% in December 2022 compared to the same month last year.
One of the main drivers of this increase in household debt is the rise in student loan debt. According to the Federal Reserve, student loan debt in the United States has surpassed $1.6 trillion, making it the second-largest form of household debt, behind only mortgage debt. With the cost of higher education continuing to rise and many graduates struggling to find well-paying jobs, it's no surprise that student loan defaults and bankruptcies are also on the rise.
Another factor contributing to the increase in household debt is the rising cost of living. Inflation has been on the rise in recent years, with the cost of housing, healthcare, and other necessities increasing at a faster pace than wages. This is making it harder for many households to make ends meet and stay current on their bills.
All of this is not good news for those individuals and households who are already struggling with debt. With more and more people falling behind on their payments, it's likely that we will see an increase in the number of bankruptcies filed in the coming years.
It's worth noting that bankruptcy can provide a powerful tool for financial recovery, by providing relief from collections and creditor harassment, protecting assets, and providing a fresh start. However, it's important for individuals and households to understand that bankruptcy is not a decision that should be taken lightly. It's always a good idea to consult with a bankruptcy attorney to understand the pros and cons of filing for bankruptcy and to ensure that it's the right decision for your specific financial situation.
It's important for individuals and households to understand that bankruptcy is not a decision that should be taken lightly and to consult with a bankruptcy attorney to understand the pros and cons of filing for bankruptcy and to ensure that it's the right decision for your specific financial situation.

Comments