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Bankruptcy could be the answer to overwhelming unsecured debt

On Behalf of | Feb 25, 2016 | Credit Card Debt, Firm News

The economy seems to be bouncing back from the recession. As a result, the total amount of debt carried by U.S. households is on the rise. For some Florida residents, unsecured debt — such as from credit cards — could quickly become overwhelming, and bankruptcy could be the answer.

In the last three months of 2015 alone, consumers across the country took on $51 billion in debt. By the end of the year, the indebtedness of those living in the United States was nearly $12.12 trillion. Reports indicate that mortgage debt holds the number one spot for the type of debt that is included in those numbers, with student loans running a close second.

The average household debt nationwide is approximately $46,170. However, that number varies widely from state to state. In states with a high cost of living, such as California, the average debt reaches nearly $65,510 per capita — most of which is attributed to mortgage loans. Three states, Florida, Nevada and Texas, have higher auto loan debt than student loan debt. Credit card debt appears to be highest in New Jersey.

As consumers have once again become comfortable with the state of the economy, they have loosened their purse strings and begun buying again. Mortgage debt may still be at the top of the list, but unsecured debt can get out of control just as easily as any other kind of debt. The debt owed on unsecured personal loans and credit cards can add up quickly. When it becomes overwhelming, bankruptcy can provide some much-needed relief and a clean financial slate upon which to rebuild.

Source: Bloomberg Business, “The States With the Most Household Debt“, Anne Riley, Feb. 19, 2016

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