American debt rapidly increasing

The United States has found itself recovering from the Great Recession for the last several years. With this in mind, Mississippians may guess that Americans are being more conservative with their money: trying to save more and spend less. Recent data that has been released on the topic, however, reveals quite the opposite is true. Debt, including credit card debt, is on the rise at an incredible rate.

The Federal Reserve Bank of New York just released data about Americans' personal finances. Consumer debt is on the rise, reaching over $11 trillion. The number is startling in light of the current state of the economy. Debt has actually increased since 2011. In fact, the increase took a particular hike at the end of 2013, when debt increased by about 2 percent -- or a couple hundred billion dollars.

One of the specific debt problems that people are facing concerns their credit cards. Credit card debt is on the rise. Comparing individuals' credit card debt with their savings highlights the specific financial challenges. Nearly 30 percent of people have more credit card debt than they have in savings.

The practical implications of this debt to savings ratio means that Mississippians likely cannot pay off their debt, even they want to. This may seem like a dead end to some. There may be some ways to tackle the debt: bankruptcy is an option.

Bankruptcy is the process by which someone discloses their financial problems to the legal system in order to organize and possibly discharge their debts. The process is extremely procedural. An individual with debt begins the process by filing a bankruptcy petition. This is the first document in the case. It essentially requests the bankruptcy court for assistance. And once this document is filed, the process begins and debt relief is one step closer.

Source: TIME, "Americans Are Taking on Debt at Scary High Rates," Sam Frizell, Feb. 19, 2014

No Comments

Leave a comment
Comment Information

Office Location

7160 Tchulahoma Road Suite A5
Southaven, MS 38671

Toll Free: 888-341-8136
Phone: 662-655-1605
Fax: 866-267-5360
Southhaven Law Office Map

Review Us