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.
Student loans have left many Texans struggling to make ends meet. With college costing tens of thousands of dollars, many consider whether it's even worth it. But those who do choose to take on debt to obtain an education can wind up paying on those loans for a significant period of time, even if they are able to obtain good jobs upon graduation.
Recently, this blog discussed a survey regarding credit card debt. It found that about half of all Americans carry a credit card balance from month-to-month. There are many reasons for this, including the sudden onset of a medical condition and the loss of a job. Regardless of the specific circumstances at hand, many Texans who turn to credit cards do so because they are in need of financial resources to cover debts that can't afford. While many make a zealous effort to pay these debts off, the sad reality is that it is often a debt spiral that can quickly get out of hand.
There are many ways that individuals can find themselves saddled with debt. In many cases, though, Texans are forced to turn to credit cards to cover unexpected costs, whether they be car repairs, medical bills or home maintenance. While these cards provide quick access to a line of credit, individuals who use them can find themselves hurtling toward a seemingly inescapable debt spiral.
Far too many Americans struggle with debt. While some of this debt is due to out of control spending, in many instances, it is caused by an unexpected event, such as the onset of a medical condition or the losing of a job. Many people who wind up in this position struggle to try to dig themselves out of the hole, but the financial obligations often prove overwhelming. Bankruptcy provides these individuals with a very real debt relief option. However, many Texans find themselves wondering how it will affect them and their financial health in the future.
Dealing with debt is not easy; however, there are ways and mechanisms one can address these matters. Take, for example, Chapter 7 bankruptcy, This is often referred to as liquidation bankruptcy. This is because the Chapter 7 process requires an individual sell off, or liquidate, a significant portion of his or her assets in order to pay off creditors. There are some exemptions to this liquidation so that debtors don't have to start over from scratch post-bankruptcy. However, as those individuals who successfully complete the Chapter 7 bankruptcy process move on with their lives, they may be surprised to find that they still owe some debts. This is why it is critical to fully understand the effect of a given bankruptcy option before pursuing it.
Cash seems to be quickly becoming obsolete as more and more consumers turn to plastic to pay for their purchases. While this may not be a big shift in spending when debit cards are used, the truth of the matter is that credit cards continue to be used at a significant rate. Many consumers enjoy putting off paying for their purchases, while at the same time earning rewards. Although this can be a benefit to using credit cards, the debt accumulated through this purchasing style can quickly get out of hand, thereby leaving an individual with insurmountable debt.
Texans who have to eagerly await their next paycheck just to make ends meet know the stress and worry that accompanies living paycheck-to-paycheck. There are many events that can force you to live this way, including the loss of a job, cut hours or unexpected demotion. The onset of an unexpected medical condition can also leave you struggling to get the money you need to pay the bills. Once you start falling behind on these bills, the overdue notices can quickly snowball, leaving you in a hole that only seems to get deeper and deeper.
Millions of Americans live paycheck-to-paycheck. Most of these individuals are one financial crisis away from financial ruin. In an attempt to bridge their financial shortfall, a lot of struggling Americans turn to payday loans. In fact, about 12 million people take out one of these loans each year. While they can be quick to obtain, thereby making them enticing, they usually carry exorbitant interest rates that can be as high as 450 percent. Even with principal loans starting at as little as a couple hundred dollars, these loans can quickly spiral out of control when they are not paid back quickly.