Financial challenges and debt a growing problem for adults

| Oct 3, 2019 | personal bankruptcy |

Indiana residents will frequently face financial challenges that leave them wondering how they will get on stronger footing. This can happen for a variety of reasons, including job loss, medical debt, overspending, divorce and more. Regardless of why it happened, it is imperative to remember that there are alternatives to find debt relief. Being in financial trouble does not need to dominate a person’s life. Understanding that there may be ways to clear the debt – even if that means personal bankruptcy – is a key factor in taking that next step and getting help.

A recent report indicates that consumer debt is a rising problem for adults starting at age 18. Credit cards are the biggest problem, but other expenses are hindering their financial security too. The study was conducted by Northwestern Mutual. It says that these adults had significant personal debt nearly reaching $30,000. This is separate from mortgages. The average person is spending a third of their income to pay debt. Although the student loan crisis has been receiving the bulk of the attention, credit cards are a major concern, along with mortgages.

For millennials, credit cards make up the vast portion of what they owe. For people categorized in “Gen X,” student loans are the problem. The negatives with credit card debt are many. In general, the interest rates will be in the double-digits. Even for people with good credit, interest rates can be 16%. Those with weaker credit can pay as much as 25% or more annually. When the minimum payment is made, it can be difficult to clear the debt to a reasonable degree. If the person is spending on top of what they owe, it will lead to a circular situation that is hard to get out of.

While student loan debt can only be cleared in rare cases with certain difficult-to-reach parameters, that is not true for credit card debt. Personal bankruptcy might be intimidating to some, as they believe that it is avoiding their responsibilities or will ruin their credit forever. Neither is true. Filing for bankruptcy is a legal and time-tested way to achieve debt relief.

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