A recent survey found that the average American has over $54,000 worth of debt. What type of debt are these people carrying? According to the survey 57% is credit card debt; 30% mortgages; 30% automobile loans; and 28% medical debt. The results of this survey are staggering, but not surprising. Total household debt increased by $394 billion (that’s with a “b”) in the fourth quarter of 2022. Confidence that these numbers will decrease is extremely low when considering the rising cost of living; rising interest rates; and all too often unexpected expenses associated with daily life.
Debt has the uncanny ability of derailing our short-term and long-term goals. So, what would you do if you were debt free? Popular answers include: living a “stress free” life; pursuing a different career; building that dream home; or finally take that dream vacation.
Is a debt-free life achievable? First, analyze your situation. If you prioritized paying off your debt, would your standard of living change drastically or would you still be able to maintain a basic level of living? Also, how long would it take to pay off your debt? Will it take two years or ten? Is it sustainable under the current economic conditions?
If, after careful analysis, paying off your debt is not achievable or realistic, then you may want to consider bankruptcy. While nobody wants to consider this option, bankruptcy exists for those who have no feasible way of climbing out of their situation. Justification for not filing bankruptcy is easy: decline in credit score; loss of property; or just the stigma associated with this option. However, most of those reasons are either short-sighted or simply non-existent. Bankruptcy is a viable option to eliminating the unrelenting struggle with debt. Even if you are having a difficult time accepting this as a viable option, contact a bankruptcy attorney to discuss your situation. You may be pleasantly surprised with what you find out.