The Law Offices of Kenneth E. Lindauer
Call today for free initial consultation
800-496-1082

Experts say credit card debt is approaching unsustainable levels

Crushing levels of credit card debt have made life extremely stressful for many people in Massachusetts. High levels of household debt, including balances owed on credit cards, were the cause of the Great Recession a few years ago. Now, experts are saying that Americans are again taking on dangerous levels of credit card debt.

The experts say credit card debt is on a course to reach unsustainable levels by the end of this year. An analysis by an online company that compares credit cards shows that during the third quarter of this year, from July through September, American consumers took on $21.3 billion in new debt on their credit cards. That represents an increase of 34 percent over the same period last year.

If the trend continues, by the end of the year the average household in the U.S. will have credit card debt in excess of $8,000. An average of $8,400 is considered unsustainable, according to financial analysts. When credit card debt reaches unsustainable levels consumers can no longer afford the minimum payments and may become delinquent on their accounts.

When people are overwhelmed by credit card debt they may begin to feel their financial situation is hopeless. Fortunately, the bankruptcy laws provide ways for individuals to discharge credit card debt and get a new start financially. In a Chapter 7 bankruptcy the debtor can liquidate assets to pay creditors and have any remaining credit card debt discharged. In a Chapter 13 bankruptcy the debtor can agree to a payment plan that provides for affordable payments for a period of time, after which any remaining balances are discharged.

Source: northjersey.com, "Study: credit card debt may reach alarming levels," Melanie Anzidei, Dec. 10, 2015

No Comments

Leave a comment
Comment Information