subject: American Debt Relief – How To Come Out Of A Personal Debt Crises [print this page] The more that you examine the role of consumer debt in contemporary American lives, the more worrisome the portrait appears. Credit cards and other unsecured loans have become more than a convenience to citizens of the twenty first century United States. Borrowing not just to aid one's household in times of emergency but to prop up a standard of living may as well be seen as a national birthright. This sort of behavior has taken its toll on not just the families affected by out of control spending but also the country's larger economy and credit rating as compared to other nations. Currently, more than forty percent of American families purchase more every year than they make in combined incomes. Additionally, the average household now nudges the precipice of a staggering ten thousand dollars in unsecured loan balances.
It should come as no surprise that alongside the explosion of credit card usage over the past two decades, the incidence of Chapter 7 bankruptcies has also skyrocketed with the number of declarations over twice the amount of only twelve years ago. Not counting home mortgages, the residents of the United States owe more than two trillion dollars all told. That figure does incorporate vehicle loans, which are secured by collateral, but the most recent estimations of the credit card balance for the men and women of America still comes in at around three quarters of a trillion dollars. This, too, about doubled over the same amount of time.
Why did our citizens turn to credit card borrowing in such record numbers? Leading economic correspondents have a few different ideas. Certainly, the historic stretch of extremely low Annual Percentage Rates allowed many Americans to not quite feel the pinch of interest the way they would have in past years. The core of the dilemma, though, seems to have been the shifting direction of the American economy. Real estate speculation created a bubble in property values that, together with the woefully under regulated home equity loan industry, encouraged otherwise reasonable home owners to take out mortgages that they could never pay back. As more and more businesses began conducting commercial actions over the internet, consumers were forced to therefore grow increasingly accustomed to the use of credit cards for even the most mundane tasks.
In perhaps the most profound alteration of the financial landscape, the growing popularity of credit cards and the profits earned by the multinational corporations started a vicious cycle which culminated in greater account balances of revolving debt offered to consumers with lessened qualifications. Of course, opening up the eligibility requirements for credit cards meant that the lenders could raise the interest rates and demand significantly harsher penalties for purchases beyond the spending limit or a failure to pay the monthly minimums on time. In short, a perfect storm of economic motivators unknowingly conspired to lead the average American family toward the debt predicament in which we now find ourselves.
Indeed, about the only positive repercussion from the deluge of available credit has been the advent of new strategies which assist the more responsible consumers in lifting their households out of the debt doldrums. Settlement negotiation, for example, has proven to be remarkably successful at satisfying the most basic needs of the creditors while still allowing debtors to emerge from serious financial difficulties. Better for us all if we had never gone down this road in the first place, of course. Still, if we can't turn back time, we can at least prepare for the future.
American Debt Relief How To Come Out Of A Personal Debt Crises
