Tag: credit card debt

Credit Card Debt, Debt Relief

Total Household Debt by Type

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American household debt stands at a whopping $17.943 trillion dollars. Mortgage debt makes up 70% of that.  Inflation has contributed to more debt and the average debt rising in nearly every category compared to 2020. This includes total household debt, credit card debt, mortgage debt, and auto loan debt. Total debt is up by over $2.5 trillion since 2020.

Average consumer household debt in 2024

According to the latest Household Debt and Credit survey, Americans owe $1.166 trillion in credit card debt as of the third quarter of 2024. That’s a record high, up from $1.162 trillion in the second quarter. Americans had an average of $6,501 in in credit card debt in the third quarter of 2023, according to Experian.

Based on data from the second quarter in 2023, Gen X carries the highest average credit card balance, $8,870, while Gen Z carries the lowest average credit card balance, with $3,148.

Paying off debt and finding relief.

It may seem like you have too much debt to ever get out of. However, the first step is to address your debt.  Understand the total amount of debt you have. From there you can determine what type of debt you hold, like credit card debt, mortgage, or auto loan. Then it is important to note how much you owe, what the interest rate is, and what the minimum payment amount is for each type of debt you own.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm; we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

SOURCE: Average American Household Debt in 2024: Facts and Figures

Credit Card Debt

Average American Household Has More Than $10,000 in Credit Card Debt

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As of the third quarter of 2024, the average American household credit card balance was about $10,757.

The personal-finance website WalletHub released a new credit card study, which found that consumers added $21 billion in debt during the third quarter of 2024.

Early results for the fourth quarter of the year show preliminary data for October at a record high for credit card debt.

The record-high credit card debt in October reflects a 3% year-over-year increase after inflation adjustments, driven by rising interest rates and holiday spending. While Q3 debt growth slowed compared to 2023, total debt remains high at $1.29 trillion.

With the holidays winding down, many Americans are expected to add more to their credit card balances before the end of the year.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.  It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans.  There are certain qualifications a consumer must meet regarding income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

SOURCE: https://www.thecentersquare.com/national/article_408ef9cc-b429-11ef-8570-fb91e62992d2.html

Credit Card Debt

When Does Credit Card Debt Become Uncollectable?

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Many consumers struggle with credit card debt, with the average credit card user carrying a balance of $6,329. Loss of income, divorce, job loss and other factors can cause credit card debt to spiral out of control. At what point does credit card debt become uncollectible?

The process of credit card debt becoming uncollectible begins when payments stop. Creditors can sell unpaid debt to collection agencies after three to six months. These agencies will attempt to collect the debt, but only 20-40% of the original balance owed.

After this point, if the debt remains unpaid, it becomes uncollectible after several years, depending on which state you live in. In Florida, debt becomes uncollectible when the statute of limitations expires.

The statute of limitations for debt in Florida is five years and begins on the date of the first missed payment or when the liability occurred. After the statute of limitations has passed, the lender cannot garnish wages or sue the borrower to enforce the loan agreement.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans.  There are certain qualifications a consumer must meet regarding income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

Please click here to read more.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Credit Card Debt

Credit Card Debt Among Retirees Jumps

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While credit card interest rates are at an all-time high, the amount of retirees with credit card debt has increased substantially.

About 68% of retirees had outstanding credit card debt in 2024, up from 40% in 2022 and 43% in 2020, according to a new poll by the Employee Benefit Research Institute.

This is a worrisome financial trend, since many retirees are on a fixed income. About 2 in 5 cardholders have maxed out or nearly hit their card limit since early 2022, resulting from inflation and higher interest rates, according to a recent Bankrate poll.

There are a few ways retirees can get their credit card debt under control.

  1. Reduce expenses
  2. Boost income
  3. Reduce your interest rate

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans.  There are certain qualifications a consumer must meet in regard to income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

Please click here to read more.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Credit Card Debt

How Much Credit Card Debt is Too Much?

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Surging inflation has left millions of Americans relying on credit cards to cover basic necessities, resulting in a sharp increase in defaults. Consumers owe a collective $1.14 trillion on their credit cards, according to the Federal Reserve.

While each consumer’s financial situation is different, there are ways to determine if your credit card debt is too high.  Consider your answers to the following questions:

  • Is your credit card debt impacting your financial and emotional health? Carrying large amounts of credit card debt can damage your credit score and cause you to experience financial and emotional stress. A good rule of thumb is to ensure your monthly payments are not more than 10 percent of your monthly income.
  • Are you paying only the minimum? Credit cards typically have low monthly minimum payments, but that doesn’t mean they are affordable just because you can cover that amount. If you are only able to make the minimum payment, that can be a sign you have too much credit card debt.
  • Is your credit card debt impacting your credit score? Credit cards can help your credit score- or hurt it, depending on how you use them. It is recommended that you keep your credit utilization below 30 percent. Having significant credit card debt can have a negative impact on your credit score. This can make other debts, like your mortgage and car payments more expensive.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans.  There are certain qualifications a consumer must meet in regard to income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

Please click here to read more.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Credit Card Debt, Credit Score

What To Know Before Closing a Credit Card with a Balance

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While you can close a credit card with a balance, there are a few things you should keep in mind. At $17.69 trillion in the first quarter of 2024, United States consumer credit card debt is at its highest level ever recorded by the Federal Reserve Bank of New York. Per household, that totals to about $10,848.

It can be tempting to want to close these cards out, and for good reason. But doing so may not lead to what you expect- especially if you have had the card for a long time.  By closing the credit card, you are skewing your credit utilization ratio.

Credit history encompasses 15% of your credit score. Closing a credit card means you lose that credit limit. In addition, you are at risk of accruing additional fees if the minimum payment you can afford is smaller than the interest added each month.

Another common mistake credit card users make when closing out their account is not verifying whether their account is closed. Without written confirmation, the cardholder may continue accumulating fees and penalties, unknowingly.

Neglecting any residual balance repayment after the card is closed can lead to an increase in debt. Paying close attention to those payments is essential, even if you have decided to close the account.

Click here to learn more.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Bankruptcy Filings, Bankruptcy Trends

Bankruptcy Boom: Why More Young Adults are Filing for Bankruptcy

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Bankruptcy filings among 18 to 29-year-olds have surged 17% from Q1 to Q2 of 2024 and are up 13% compared to last year.

While the pandemic produced a drop in filings due to relief measures, debt among young adults has since risen, reaching $1.12 trillion for 18- to 29-year-olds. Filings have jumped 50% since a 24-year low in early 2022.

This trend is aligned with other factors, including rising interest rates, which have driven up minimum credit card payments. Some people avoid filing for bankruptcy due to the fear of damage to their credit and the stigma of being labeled ‘financially irresponsible,’ even when it could offer a much-needed fresh start.

While bankruptcy is often considered damaging to a person’s credit score, that is not entirely accurate. Many people’s credit score is already struggling by the time they consider filing.

Filing for bankruptcy can actually give your credit score a boost once your debts are wiped out, as long as you have a solid plan to rebuild your credit strategically. There are two main types of consumer bankruptcies: Chapter 7 and Chapter 13, and choosing the right one depends on your financial situation. To see if bankruptcy is the right choice for you, start by talking with an experienced attorney who specializes in bankruptcy law.

Click here to read more.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Consumer Debt, Credit Card Debt

Consumer Credit Card Debt Reaches an All-Time High of $1.14 Trillion

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Consumers are carrying more debt than ever before on their credit cards, according to a new report from the Federal Reserve Bank of New York. Outstanding credit card balances in the U.S. have reached $1.14 trillion.

Credit card balances grew by $27 billion over the first three months of 2024, according to the report, and are up 5.8% over last year. Delinquency rates also increased for credit card holders with 9.1% of card holders now in default on their outstanding balances.

Earlier this week, new data released by Bankrate showed that 50% of U.S. credit card users are carrying a balance on their accounts, up from 44% in January. This is a rate not seen since the early days of the pandemic.

The average credit card interest rate now stands at 24.84%, according to Lending Tree. An individual’s credit score can have a significant impact on the rates charged by card issuers. For example, an applicant with exceptionally good credit can expect an average APR of 21.41% while someone with a poor credit history will see an average APR offer of 28.28%.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.  It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that don’t even seem to make a dent.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans.  There are certain qualifications a consumer must meet in regard to income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

Please click here to read more.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Credit, Credit Card Debt

Banks Prepare for Consumers to Stop Paying Off Their Credit Cards

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Big banks, like JPMorgan Chase, Bank of America, Wells Fargo and Citigroup are preparing to face more risk when it comes to their lending practices. With interest rates sitting at a two-decade high and inflation rates rising, these banks have raised their provisions for credit losses from the previous quarter.

These provisions are the money that financial institutions set aside to cover any potential losses from credit risk, including delinquent or bad debt and lending, like commercial real estate (CRE) loans.

JPMorgan built up $3.05 billion in provision for credit losses in the second quarter; Bank of America had $1.5 billion in stores; Citi’s allowance for credit losses totaled $21.8 billion at the quarter’s end, more than tripling its credit reserve built from the prior quarter; and Wells Fargo had provisions of $1.24 billion.

A recent analysis by the New York Fed found that Americans owe a collective $17.7 trillion on consumer loans, student loans and mortgages. Credit card balances totaled $1.02 trillion in the first quarter of the year.

Credit card issuance and, subsequently, delinquency rates are also on the rise.

With rents up more than 30% nationwide (between 2019 and 2023) and grocery costs rising 25% in that same period, renters who did not lock in low rates and are struggling with rental prices that have exceeded wage growth are seeing the most stress in their monthly budget.

A recent survey found that 48% of Americans depend on credit cards to cover essential living expenses. As consumer’s pre-pandemic savings dwindle down, the reliance on credit for necessities, such as gas and groceries, has become the norm for many.

Click here to read more.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Credit Card Debt

How is Credit Card Debt Handled in Bankruptcy?

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Credit card debt is treated as an unsecured debt in bankruptcy. Unsecured debt is debt that is not secured by any collateral. For example, a mortgage would be a secured debt guaranteed by your home; an auto loan would be a secured debt guaranteed by your car. Unsecured debts, like credit cards, medical bills, and personal loans can be easily discharged in bankruptcy.

Most consumer bankruptcy cases do not include any assets, and there is no property that can be liquidated to pay off creditors. Any funds from liquidated assets are paid to creditors based on priority. Credit card companies and other unsecured creditors are usually last on the list.

If you file Chapter 13 bankruptcy, your repayment plan will be approved if it repays most or all your creditors over a three-to-five-year period. But that doesn’t mean all creditors will be repaid, some not at all. Creditors are repaid according to priority in Chapter 13.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges. Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans. There are certain qualifications a consumer must meet regarding income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

SOURCE: Credit Card Debt Under Bankruptcy Law | Bankruptcy Law Center | Justia