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Consumer debt continues to threaten struggling families

| Aug 5, 2020 | Chapter 7 |

In light of current economic struggles, many Louisiana families are facing serious financial concerns. Despite a government stimulus bill, many Americans are facing the possibility of either taking on more debt or losing homes, enduring wage garnishment and falling behind on their financial obligations. Financially struggling families continues to struggle under unmanageable consumer debt burdens.

According to data from March 2020, Americans had to dedicate as much as 96% of their after-tax income to pay for their mortgages, credit card balances, car loans and student loans. Many were struggling before this most recent economic downturn, carrying over debt from the last recession. Other statistics indicate that as many as 24% who are recently out of work or furloughed depended on credit cards and other types of loans to carry them through.

A large percentage of those who had to rely on credit cards and take out loans also had to borrow money from friends and family to make ends meet during this time. It is possible that overwhelmed consumers may find they have to rely on risker loans in the future, such as those with higher interest rates and terms that could result in complications.

Many in Louisiana are facing the possibility of continued financial struggles. When those who are struggling to pay bills are unable to manage consumer debt, they may benefit from the process of bankruptcy. This protection shields them from continued contact from debt collectors and any collections efforts, and it provides a way to effectively deal with certain types of balances, including credit card debt and medical bills.

Facing Overwhelming Debt?