The amount of debt held by U.S. residents has soared, reaching the same record levels experienced at the brink of the recession that began in 2008. However, rather than home mortgage debt, this time the debt largely relates to vehicle loans and educational loans.
At the close of the first court in 2017, debt levels were up to $12.73 trillion. This is a $473 billion increase from this time last year. Indebtedness is currently 14 percent higher than it was in 2013. The last peak of debt in 2008 reached $12.68, which is lower than current debt levels.
Debt delinquency rates are currently at 4.8 percent. Debt balances appear to be held by borrowers who are more creditworthy, but 11 percent of student loans are delinquent and this could represent a problem for the economy. Student loan debt increased by $83 billion, up to $1.34 trillion, by the first quarter’s end in 2017. Auto loans increased by $96 billion, up to $1.17 trillion.
Although analysts believe that falling unemployment rates and a steady inflation will assist in lowering delinquency rates, the issue of student loan debt delinquency remains on the table. This debt could ultimately put a dent in home ownership levels and spending by consumers.
Most types of student loan debt usually cannot be resolved through the bankruptcy process. However, the bankruptcy process can be used to resolve many other kinds of debt for King County residents, which can free up additional income to start getting student debt under control faster. If you’re currently underwater with debt, a bankruptcy lawyer can offer you various solutions to assist you in achieving financial stability again.
Source: Reuters, “Americans’ debt back at record high after nearly a decade,” Jonathan Spicer, May 17, 2017