Many families in Texas struggle with credit card debt. Across the U.S., Americans owe about $905 billion in credit card debt. That works out to around $15,654 per household. While this seems like a lot, other debts are even worse. The total amounts owed on mortgages, car loans and student loans are in the trillions.
The credit card debt levels faced by consumers in the U.S. continues to rise. One reason for this is that more people are putting medical expenses on their credit cards. According to the Bureau of Labor Statistics, medical costs have gone up 34 percent over the last 10 years while income has grown only around 20 percent. An estimated 27 million adults have resorted to credit cards to pay their medical bills.
Another reason why credit card debt is increasing is that many people report that they spend money on unnecessary items. This can lead to increased credit card balances due to high interest rates for debtors who carry a balance forward instead of paying off their credit cards every month. This habit may result in a higher debt burden over time.
To get out of debt, many people choose to file for bankruptcy. The two most common types of bankruptcy debtors are Chapter 7 and Chapter 13. A Chapter 7 bankruptcy allows the debtor to discharge all unsecured debt and keep property that is exempt under state and federal law. A Chapter 13 bankruptcy allows unsecured debt to be discharged after the debtor has made payments according to a plan for three to five years. Some debtors may choose a Chapter 13 bankruptcy if they wish to keep property that is not exempt under Chapter 7 rules.
A bankruptcy attorney may be able to help a client decide if bankruptcy is right for them. In many cases, bankruptcy can help a debtor obtain a fresh financial start.