According to a report from Clever Real Estate, Americans have twice as much credit card debt as they did in 2000. Households in New Jersey and throughout America have an average of $31,420 worth of debt, which is more than the average American salary in 1950. In that year, the typical American household had $533 in debt. Researchers say that credit cards are one of the three primary factors for such a significant increase over the past 70 years.
The report indicated that financial literacy and where people live play a role in how much they owe to lenders. In 2018, roughly 70% of borrowers didn’t pay the full balance on their credit card debts, and they ended up paying $113 billion in interest and fees. The increase in credit card and other consumer debts has correlated with an increase in bankruptcy since the 1980s according to the report’s authors.
Credit card debt is especially dangerous because it may encourage people to spend more than they make. Data from the FINRA Investor Education Found that 19% of Americans spent more than they made in 2018. Credit card and other revolving debt is up 20% since 2013, and during that year, debtors spent $74.5 billion in credit card interest and other fees.
Filing for Chapter 13 bankruptcy may be an ideal solution for those who are looking to get a fresh financial start. During the course of the repayment period, creditors generally cannot take actions such as foreclosing on a property or repossessing a vehicle. This may allow a debtor to seek new loan terms or sell an asset before it can be taken away. An attorney may explain how to file for bankruptcy and why a Chapter 13 proceeding may meet a person’s financial needs.