Student loan debt throughout Tennessee and across America has risen to more than $1.5 trillion. However, for those between the ages of 25 and 34, credit card debt is actually a larger burden. According to the 2018 Planning and Progress Study from Northwestern Mutual, credit card debt makes up roughly 25 percent of the debt burden for those in that age group. Student loan debt makes up about 16 percent of the debt burden for someone aged 25 to 34.
The survey found that many did not find paying down debt to be a top priority. However, this can be a problem as the average interest rate on credit card debt is about 17 percent. That may lead to a scenario where it is impossible to make even the interest payment on the debt. If a debtor misses a credit card payment, that person could face interest rates of up to 30 percent in addition to late fees.
Anyone who has already accrued credit card or other types of debts should look for ways to reduce expenses or to increase their income. This can make it easier to pay down existing credit card or other balances with high interest rates. Once balances are paid off, it is important to start saving to avoid going into debt in the future.
Obtaining debt relief may be possible by filing for Chapter 13 bankruptcy. Those who choose to do so may receive an automatic stay of creditor contact or other collection actions. Furthermore, debtors may be allowed to keep their property while the case is ongoing. An attorney could talk more about other benefits of bankruptcy as well as information needed to file. In a Chapter 13 case, payments are made to creditors for either three or five years.
