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Credit card debt on the rise

On Behalf of | Mar 15, 2018 | Chapter 13 Bankruptcy

Some people in Texas may be carrying a significant amount of credit card debt. By the end of 2017, Americans collectively added the most debt to their credit cards since before the recession of 2007. In all, total credit card debt is more than $1 trillion.

There was a significant debt increase of $43 billion in 2015 to $87 billion 2016. This was a period of historically low rates for charge-offs. However, credit card delinquency rates are up slightly to 7.5 percent from 7 percent. It’s important to note that this is still half the rate it was during the financial crisis.

In the final quarter of 2017, household credit card debt had risen 6 percent from the final quarter of 2016 to an average of $8,600. In a study by WalletHub, nearly two-thirds of people attributed some of their credit card debt to medical expenses. According to the Centers for Medicare and Medicaid Services, Americans spent $338 billion on expenses such as copays and deductibles in 2015.

Falling behind on bills, whether it is a result of medical debt or for some other reason, can be a stressful experience. When creditors begin to contact debtors, the situation may feel even more dire. However, an attorney could review a client’s options for debt relief. One option might be filing for bankruptcy. Some people might think they will lose everything in a bankruptcy. With a Chapter 13 bankruptcy, however, a person can work out a payment plan to repay some debts over three to five years. This option also allows a person to keep some assets, such as a home.