Earlier this year, Forbes released a report that contained some troubling statistics about the precarious financial situation that many Americans today find themselves in. According to Forbes, an estimated 54 percent of U.S. adults “have less than $1,000” in their bank accounts and are essentially living paycheck to paycheck.
At some point or another, many Cincinnati residents will face financial problems. From an unexpected home or car repair to a job loss or serious illness; without savings to fall back on, an individual may be forced to borrow money from family members or rely on credit cards. While it’s extremely easy to rack up debt, it’s often exceedingly difficult to pay it down or off.
2015 statistics show that the average U.S. household carried more than $15,300 in credit card debt and $27,000 in auto loans. Because so many Americans carry large sums of debt, it can difficult to know when you really are in trouble and should consider filing for bankruptcy.
The following are three key indicators that your debt problems are unmanageable.
- Reliance on payday loans – If you’re having trouble making ends meet and covering your expenses until the next pay day, the concept of a payday loan may seem attractive. However, the interest rates and fees associated with these short-term loans often total hundreds to thousands of dollars.
- Using credit cards to pay for necessities – Relying on credit cards to afford basic necessities like food and utilities is a sign that you are overextended and likely need to reevaluate your financial situation.
- Only paying or aren’t able to pay minimum balances – With the average credit card interest rate of around 17 percent, it’s virtually impossible to pay off debt if you’re only paying the minimum each month. In cases where you default on credit card debt, creditors will take swift and aggressive action(s).
The truth is that almost anyone can fall on bad times and become trapped in a vicious and revolving cycle of debt. If any of the scenarios above describe your current financial situation or if you are concerned that your debt to income ratio is too high, it’s a good idea to consult with a bankruptcy attorney.