It’s not an unknown fact that millions of Americans are in debt. The lifestyle choices we make have placed many of us in tight financial situations. A lot of these life choices were to try and make a better living, but debt still consumes a lot of responsible American adults.
For instance, going back to school without a scholarship usually requires a Fannie Mae or other type of loan to be taken out. If work isn’t found within the grace period after graduation when loan payments start to kick in, it’s inevitable for graduates to fall into a well of debt that is difficult to climb out of. There are all types of debt that U.S. citizens are facing today, including:
- Mortgage loans
- Car notes
- School debt
- Credit card debt
- Other loans
A Look into Consumer Debt in America
As mentioned, there are different types of consumer debt that have Americans in a woeful financial situation. The average consumer debts profile for U.S. households are:
- $15,422 for credit card debt
- $149,782 for mortgage debt
- $34,703 for student loan debt
Altogether, American consumers have $11.31 trillion worth of debt. In 2011, this was 0.7% lower. This is how this number is spread across different types of debt:
- $858 billion in credit card debt
- $8.03 trillion in mortgage debt
- $956 billion in student loans (a 4.6% increase from 2011)
It’s easy to say that credit card debt accounts for majority of the debt Americans are in today. However, is in fact the third biggest source of debt for U.S. households, following student loans and mortgages loans.
Getting Out of Debt
There are many ways to get into debt, but there are only a few available ways to get rid of it. Debt relief options for Americans include:
- Debt consolidation
- Debt settlement
- Debt loans
Depending on the route you take will determine how long it takes to raise your credit score and clear your name of debt. For instance, with debt consolidation and debt loans, consumers are able to obtain a loan that will pay off all debts, making it just one debt total that they now owe.
Then there is debt settlement, where the consumer or a debt settlement agent can contact the creditors to negotiate a smaller balance to be paid off in full. This is done until all debts are paid off. Bankruptcy filings (chapter 7 and chapter 13) are available, but will place a blemish on your credit report. With a chapter 7, all debts are cleared, except certain debts like liens, mortgages and car notes. Liquidation of all assets is required to pay off whatever debt possible. The Chapter 13 bankruptcy is an agreement to repay the debt within a specified amount of time (i.e. 5 years). No liquidation is required and no debts are erased from your credit history.
In order for Americans to get out of debt, debt relief options must be used and better financial planning and budgeting have to be learned.