Household debt in the United States continues to climb
Consumer debt in Florida and around the country has been climbing steadily for more than three years, and it has now reached an all-time high of nearly $13 trillion according to a report released by the Federal Reserve Bank of New York. Consumer spending accounts for two-thirds of the economic activity in the United States, and experts expect consumer borrowing to continue at a brisk pace as long as unemployment figures stay low and confidence in the economy remains strong.
The report reveals that credit card debt in the United States increased by $24 billion during the third quarter of 2017 and now stands at a worrying $808 billion. Student loans and auto installment agreements also increased sharply during the quarter by $13 billion and $23 billion respectively. However, the central bank’s figures suggest that lenders may still be reluctant to extend credit to borrowers with modest incomes and troubled credit histories.
Borrowers taking out auto loans during the third quarter had a median credit score of 705 according to the report, and the scores of those signing new mortgages were even higher. However, stricter lending practices generally reduce delinquency rates, and the 4.9 percent of household debt currently in arrears does not seem to be a major cause of concern for economic analysts and forecasters.
Delinquent debt is a problem for the millions of Americans who are struggling to make ends meet and face daily harassment from bill collectors. Spiraling debt can be an easy trap to fall into when a job is lost or an illness strikes, but lawyers with debt relief experience may explain how filing a Chapter 13 bankruptcy provides the possibility of a fresh start. It might allow individuals to remain in their homes and keep their assets while paying down their debts over a three-to-five-year period.