Tennessee residents may be surprised to learn that Americans are now carrying a total consumer debt load of $12.8 trillion. That figure is a new record high, and it tops the $12.7 trillion in consumer debt carried by Americans in 2008. Auto and student loan debt has increased significantly while credit card debt is also at a level not seen since 2009.
Auto loan debt has increased 70 percent since 2010, and it currently stands at $1.2 trillion. Overall student loan debt stands at $1.3 trillion while total credit card debt is $784 billion. Mortgage debt is also increasing and is currently at $8.7 trillion, but that is still down from a high of $9.3 trillion in 2008. All of these figures come from the Household Debt and Credit Report.
Credit card delinquencies are on the rise, and it’s possible that auto and student loan delinquency rates will also increase. While subprime interest rates are high enough to offset some losses, student loan interest rates generally are not. Traditionally, both student loans and auto loans have the highest absolute default rates. While current delinquency rates may be low, this may be because it generally takes several months before a person defaults on a balance owed.
People who are looking for a fresh financial start may be interested in filing for bankruptcy. It’s possible to have debt payments reorganized and paid over a period of up to five years. If there’s still a balance remaining after the repayment period, it may be discharged. Bankruptcy may also give an individual time to work with creditors to renegotiate loan terms. This could increase the odds of keeping a home or other property. A lawyer could help a debtor file for bankruptcy.