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Household debt increasing to record levels

On Behalf of | Aug 6, 2018 | Chapter 13 Bankruptcy

In October 2009, the unemployment rate throughout the country was 10 percent. Roughly 10 percent of credit card accounts went into bad status. Between 2008 and 2013, Texans and other Americans had begun to make paying down debt a priority as a result of the recession. However, by the first quarter of 2018, household debt in the United States was at $13.2 trillion, which was the highest total ever recorded.

It is important to understand American consumers have other debts beside their outstanding credit card balances. Mortgages, student loans and auto loans also contribute to the overall total Americans owe to lenders. As the Fed raises interest rates, it could have an impact on how individuals handle their finances. Ideally, people will save as if the economy is booming and spend like they did during the recession.

If a person is having trouble dealing with credit card or other types of debt, it may be a good idea to look into filing for Chapter 13 bankruptcy, whichallows an individual to reorganize existing debts and pay them off over either three or five years. It also prohibits creditors from calling or sending letters about an outstanding debt until the case has been resolved. Debtors are generally allowed to keep property such as a car or house if they remain current on the payments.

An attorney can explain the process and requirements of filing a Chapter 13 petition. For instance, a debtor will need to create a repayment plan and in most cases pay filing fees. There are other eligibility requirements that an attorney can outline.