When does credit card debt become so big that trying to chip away at it no longer makes much sense? Many people in the San Antonio area and across the country are struggling with this question.
Of course, the need for debt relief varies by person often reflects someone’s stage in life. For young people, the most pressing issue may be student loan debt. For senior citizens, it may be medical bills. But clearly many middle-aged people are facing surprisingly large amounts of credit card debt.
Statistics from the public policy research firm Demos bear this out. According to data from Demos, people over 50 who owed debts to credit-card companies for three months or more had an average debt of more than $6200.
This finding is at odds with the usual caricature of the profligate college student who rang up big credit card bills without really thinking about them. Underwriting standards for issuing credit have tightened since that stereotype took hold. So the proverbial charge-happy student may not even have a card at all these days.
Or, if the student has a card, it may one that his or her parents have had to co-sign for. And arrangements like that are among the reasons why the baby-boomer generation is so financially stretched. The Great Recession has depleted boomers retirement accounts and subjected many of them to job loss.
As a result, credit card debt can become a short-term financial lifeline for people scrambling to pay for groceries and other necessary expenses. But relying on credit card debt can haunt you in the longer run, as the bills pill up and the hope of paying them down starts to seem unrealistic amid the unrelenting financial pressure.
This is where a bankruptcy filing may make sense, however, as a way to finally get your arms around your financial problems. With the automatic stay on debt collection it provides, bankruptcy can allow you to develop a plan to deal with your debt and move forward into the future toward a fresh financial start.
Source: “Boomers Face Credit-Card Quandary as Economic Doldrums Bite,” Fox Business, Chris Taylor, 2-20-13
Our firm handles situations similar to those discussed in this post in the San Antonio area. To learn more about our practice, please visit our page on consumer bankruptcy.