The Assets and Opportunity Scorecard estimates that approximately 132 million Americans couldn’t survive through a three-month period should their regular income cease. Over 25 percent of middle income families are in this situation, and another 25 percent have far more debt than their net worth in their home or business. These facts may lead more families to seek debt relief.
When families don’t have a savings account, which it is estimated that over 30 percent of Americans don’t, it makes handling emergencies difficult. Things like health care costs not covered by insurance, housing repairs and even higher-than-expected college tuition can cause consumers to use credit cards to cover the gaps. On average, Americans carry over $10,700 in credit card debt. An increasing number of families rely on expensive services like payday advances to stay afloat.
The costs of food and housing have skyrocketed, but since 2006, the median net worth of an average household has dropped by over $27,000. This leaves families with less money to spend and higher bills to pay and that loss of spending power can result in businesses having to lay off employees.
Growing consumer debt is a problem that many families continue to face. An unexpected illness or a job loss can create chaos in an already fragile household budget. There are forms of debt relief that a bankruptcy attorney may be able to recommend. Sometimes, it is possible to work with creditors and create restructured payment plans outside the Bankruptcy court and it may be possible for an attorney to assist in this process. However, when that is not possible, bankruptcy may offer relief for those struggling with mounting debt.
Source: Opposing Views, “Study: Almost Half Of Americans Live On Edge Of Financial Ruin,” Michael Allen, Feb. 5, 2013