Top causes of debt in 2014: Credit cards, mortgages and student loans

Families throughout the United States are struggling financially. According a recent report, top causes of debt are home mortgages, student loans and credit card debts. Various options are available for those struggling to stay afloat financially.

Families across the United States continue to struggle with debt. Although many may be recovering from the financial fallout connected to the home mortgage crisis over the past ten years, financial difficulties still exist. According to a recent report by NerdWallet, an online financial resource, one of the top areas of debt that Americans continue to struggle with is credit card debt.

According to the report, consumer credit card debt in the United States is third only to mortgage debt and student loans. The consumer debt profile for the average American was estimated at approximately $32,000 in student loan debt, $155,000 in mortgage debt and $15,000 in credit card debt.

More on the report

Financial experts with NerdWallet reviewed data from The U.S. Census, The Aggregate Revolving Consumer Debt Survey and The Survey of Consumer Finances. Based on this information, households carrying credit card debt averaged $15,611 in 2014.

Options for those struggling with credit card debt

There are a variety of options available to those who are struggling with credit card debt. These options include:

  • Debt relief services. In some instances, a debt relief service may be of assistance. Those considering reaching out to one of these services should tread carefully. Scams are common in this field. As a result, before contacting any service it is wise to reach out to the state Attorney General and local consumer protection agency to check for any record of consumer complaints. Some common red flags include an advance fee for a guaranteed loan to cover debt or a claim to "repair" credit.
  • Debt consolidation. For others, consolidating various forms of debt into a second mortgage or home equity line of credit may provide a viable option for debt management. This process can be risky since it requires the homeowner put his or her home up as collateral. As a result, anyone who falls behind in payments could lose their home.
  • Bankruptcy. There are two main forms of bankruptcy that can offer a fresh financial start for those struggling with credit card debt: Chapter 7 and Chapter 13. A Chapter 7 petition for bankruptcy relief generally leads to a discharge of debt that cannot be settled after liquidation while a Chapter 13 petition leads to a debt reorganization plan that allows for a more manageable approach to repayment.

Regardless of the option you believe is best for your situation, it is wise to seek the counsel of an experienced credit counseling lawyer. This legal professional will review the details of your situation and help guide you towards the option that is more likely to set you up for future financial success.

Keywords: bankruptcy credit card debt