Americans now hold record amounts of debt as the pandemic continues to subside and life returns somewhat to normal. In the last 3 months US household grew to $15.24 trillion.
During the pandemic consumers used stimulus to pay down credit cards and other debts, but now as Covid-19 winds down household debts are climbing again and at an unbelievable and likely unsustainable pace. Credit card debt is up $17 billion I the last quarter, mortgage debt is up $230 billion, car debt up $28 billion, student loan debt up $14 billion. Overall, total household debt is $1.1 trillion higher than at the end of 2019.
What does this mean for consumers? For many it means that bankruptcy is becoming a better option once all ability to accumulate debt is gone. Realistically, with inflation starting to creep into prices across various industries, consumers would do well to us bankruptcy to wipe out their debts only after using the debt to their advantage. For instance, using credit to offset the increase in prices for food or household necessities then turning around and filing a chapter 7 bankruptcy once they have maxed out their debt is a good way to leverage the system in your favor. Big corporations do this so there is no reason why consumers shouldn't follow suit. If you have questions about bankruptcy call us today.