Household loans and unsecured debt nearing 2008 peak

Household debt in Florida and throughout the U.S. has reached a level not seen since the all-time peak prior to the sub-prime mortgage crisis and ensuing market meltdown. CreditCards.com reports that 24 percent of the nation’s citizens currently claim to be free of debt. However, data shows that credit card debt is growing for rest of the country. The picture looks more bleak according to a Bankrate.com study that found that only 52 percent of Americans have enough emergency savings to cover outstanding credit card debt.

As many Florida residents are aware, the growth in credit card debt and other revolving accounts is only one part of the overall increase. The mortgages, auto loans and student loans also accounted for large chunks of the $226 billion household debt increase in the fourth quarter of 2016. With the largest debt increase in three years, and a revolving account total exceeding the 2008 level, one industry analyst predicted a quick rise in delinquencies in 2017.

The latest data showed a delinquency rate still in the single digits and lower than what was seen in 2008. However, credit card debt is closing in on the trillion dollar mark, and auto and student loans have both surpassed that threshold.

Many Florida residents may be one small disaster away from defaulting on multiple loans and enduring the pain and hardship that goes with delinquency. In some cases, filing for personal bankruptcy is the best way to stop creditor harassment, halt foreclosure and reduce interest payments. Debt relief under Chapter 13 can also prevent debt-related lawsuits. a lawyer can help individuals understand the Chapter 13 repayment plan process and determine if this is a possible way for them to achieve a fresh financial start.