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Consumers debt manageable for now

Declining mortgage delinquency rates may be a positive sign for consumers in Florida and throughout the country. The rate fell from 2.28 percent in the fourth quarter of 2016 to 1.83 percent in the final quarter of 2017. It is believed that this rate will continue to fall to 1.65 percent in 2018 according to information provided by TransUnion. This is despite the fact that interest rates are expected to rise.

An increase in interest rates tends to have a dampening effect on the economy. However, it may be negated over the next year by rising incomes and employment levels. Rising home prices may also help mortgage delinquency rates fall to their lowest since at least 2005. If there is an area of concern for consumers, it would be in the auto lending sector. Consumers are stretching out the length of auto loans for both new cars and used.

According to Experian, the average monthly payment on a used car tops out at $393. The average length of a car loan is about 69 months. This is a concern because long car loans combined with increasing credit card debt could make it harder to meet financial obligations over the long term. Credit card delinquencies are projected to increase to 1.98 percent in 2018 from 1.86 percent in 2017.

Filing for bankruptcy may offer individuals the ability to obtain a fresh financial start. Generally, creditors are not allowed to take action such as foreclosing on a home during a Chapter 13 repayment period. This means that a homeowner may be able to remain in his or her home during that time. A stay from creditor action may provide leverage to renegotiate loan terms or otherwise get current. An lawyer may be able to provide additional benefits when filing.

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