Debt knows no bounds. Anyone can be hit with unexpected expenses, whether they are for medical treatment, to repair much needed transportation, or to make home repairs that are necessary to keep a residence habitable. Although some people are able to dig themselves out debt, others struggle to do so and instead find themselves falling deeper and deeper into a debt spiral.
As we've mentioned previously on this blog, bankruptcy is not automatic. That is to say that the mere act of filing a bankruptcy petition is not enough to secure the fresh financial start that many petitioners seek. In fact, there may be some situations where a bankruptcy petition is contested, especially by creditors who seek to recoup their financial interests. While the vast majority of those who seek a Chapter 7 bankruptcy are either successfully discharged or have their bankruptcy converted to another form, there are still ways that bankruptcy discharge can be denied.
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.
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.
Many people in Texas may feel like the days of the Great Recession are long gone, and they may be right. After all, it sounds like the economy is humming along. Unemployment is down, wages are up slightly and consumers appear to be generally optimistic. Despite that perception, however, many individuals, are still struggling to get by.
Facing overwhelming debt can be terrifying. Not only can it prevent an individual from reaching important milestones, such as buying a house or getting married, but it can also affect one's day-to-day life. Far too often, Texans struggle to make ends meet as they fight to stay on top of their debt. This is simply unacceptable and it's no way to live. That is why these individuals need to carefully consider their debt relief options.
Previously, this blog discussed the difficulties of trying to discharge student debt, and the fact that many older Americans find themselves saddled with burdensome student loans. A new report is again highlighting the financial struggles student loan borrowers are facing.
Although the economy appears to be steadily improving, the stark reality is that many Americans continue to struggle with personal debt. As a result, many are living paycheck-to-paycheck, and any unexpected expense can quickly derail their already tight budget. One option individuals often turn to for assistance in combating these unexpected expenses is payday loans, which can quickly turn into a debt spiral.
Personal debt continues to be a struggle for many Americans, including thousands here in Texas. According to data recently gathered by Northwestern Mutual, the average American had more than $38,000 in debt in 2018. This amount did not include home mortgages. The research also found that individuals are two-times more likely to thousands, perhaps even tens of thousands, of dollars in debt than they do in savings. Only 23% of Americans didn't carry any debt last year.