Although there has been a lot of talk lately about the improving economy, many Americans are still struggling with debt. In fact, The American Bankruptcy Institute found that bankruptcy filings increased by 5% in July compared to June. That amounts to more than 64,000 bankruptcy filings last month alone, with over 450,000 petitions being filed so far this year. So that means that Texans who are finding themselves overwhelmed with debt certainly aren't alone.
It may seem as if everyone these days has at least one credit card. Though many people use these cards for various reasons, they can have their pros and cons. For some Texas residents, using a credit card may help them make an important purchase while allowing them to pay it off over time, and for other individuals, having a credit card may only result in their spending getting out of hand.
A few weeks ago on the blog we discussed how consumer debt is continuing to grow. One of the major driving forces behind this debt is auto loans. The average cost of a new car today hovers around $37,000, which is more or just slightly less than many Texans make per year. This means that financing is usually required for both new and used vehicle purchases, which has driven up automotive loans by 75% since 2009. In total, Americans owe about $1.2 trillion in auto loan debt.
Many Texans are struggling to get by financially on a day-to-day basis. For these individuals, the wait until their next paycheck can be grueling. In many instances they are just one unexpected expense away from financial catastrophe. Many people in such circumstances have tried to find debt relief through personal loans or payday loans. Payday loans have come under intense scrutiny lately, though, because of their high interests rates and the vicious debt cycle they perpetuate.