Just this month, LendingTree, an online platform that compares loans, released its Consumer Debt Outlook report for 2018. In their report, LendingTree considers consumer debt as non-mortgage related debts, including student loans, credit cards, auto loans, and personal loans.
With this data, LendingTree found that, in 2018, Americans owe upwards of 26 percent of their yearly income to consumer debt. This number is up 22 percent from 2010 and indicates that American consumer debt is on pace to reach $4 trillion by the end of 2018.
While Americans have consistently been accumulating more and more debt over the past five years, the last two years have been particularly extreme. In these last couple of years, total non-housing related consumer debt has risen by 5 to 6 percent annually.
However, overdue credit card debt is at its highest point in seven years, while mortgage debt has also increased by 5.2 percent which speaks volumes to how sky-high the amount of total consumer debt. If this wasn’t enough, the Federal Reserve plans to increase interest rates throughout the year, which is sure to worsen the burden of consumer debt.
If you are one of the people affected by high consumer debt, there are a few steps you can take to help lessen the burdens your debts place on you.
First and foremost, you should be prioritizing high-interest debts such as credit cards. Overdue credit card debt is one of the primary causes of the increase in consumer debt throughout the nation. Low-interest loans such as auto loans (or student loans) do not necessarily have to be paid off immediately. Additionally, you should try to avoid any unnecessary monthly expenses. This may include canceling service subscriptions, adjusting your shopping habits, and finding out how you can reduce your bank fees.
Another option for people who are in debt is bankruptcy, but given all that a bankruptcy entails, I would consider this to be a last resort. Debt, and debt lawsuits can be extremely stressful. Sometimes it can feel like you’ll never make it out of debt, no matter what you do. My advice to anybody who is struggling with debt is to consult with an experienced debt defense attorney. It may be possible to settle or dismiss your debts; and oftentimes, a person is in debt, their rights are violated by debt collectors. The Law Offices of Alexander Borell offer free consultations to anybody sturggling with debt; it is important for people who are in debt to understand their rights and take the proper course of action when trying to get out of debt.