Report: One-Third of Americans Struggle with Debt

The stigma of debt prevents most people from admitting their financial troubles. But according to a new study by the Urban Institute, more than one-third of Americans currently have debts in collections.

About 35 percent of Americans­­ — more than 77 million people — have debts delinquent enough to be sent to collections and reported to credit bureaus, a step that usually isn’t taken until the payment hasn’t been made on a bill for at least 180 days. These numbers reflect the toll the housing crisis and the recession has taken on the economy. The economic crisis has raised the rate of debt for credit card bills, mortgages, utility bills, medical bills, child support, parking tickets and membership fees, averaging out at about $5,200 per person.

Having debts in collection can seriously drag your credit score down and can seem like an insurmountable obstacle, but as the rate of delinquent debt grows, so do the options for coping with it. Most Americans experience serious debt at one point or another, but there are a variety of options available to help get you back on track:

• Develop a realistic budget and stick to it. List all your sources of income and your monthly fixed expenses. Include variable expenses, like groceries, transportation and entertainment.
• Get in touch with your creditors before you’re overwhelmed. Typically, they’ll work out a modified payment plan with you to reduce your payments.
• Get help with credit counseling from a reputable organization. These organizations advise you on money management, help with developing a budget, provide tips on debt management and offer free workshops.
• Seek relief with a debt settlement. Well-regarded settlement companies negotiate with your creditors to settle on repayment of a reduced lump sum.
• Consolidate your debt. Consider a second mortgage or a home equity line of credit, which can offer tax advantages.
• File for bankruptcy. Though it can take a while to get back on your feet, bankruptcy allows you to start with a clean slate.

Speak with a skilled debt relief lawyer in Pennsylvania for further guidance and advice. 

By Harold Shepley | Published January 6, 2015 | Posted in Bankruptcy, Debt, Financial Distress, Foreclosure | Tagged Americans in debt, debt, debt relief, debt settlement, recession | Leave a comment