Americans under the age of 30 owe about $1.05 trillion in overall debt, and they owe a variety of lenders such as credit card and mortgage companies. However, the biggest concern is the amount of student loan balances that young Americans carry. There are roughly 44 million Americans who owe a combined total of $1.5 trillion in such debt. For those under 30, it can delay their plans to get married or buy a home.
Overall, student loan balances are second only to mortgages, which means that Americans are paying more to student loan companies than credit card or auto lenders. Currently, 11.4 percent of student loan accounts are delinquent. That means that payments have not been made in 90 days, and that can be a sign of overall economic health. It is thought that 40 percent of student loan borrowers will be in default by 2023.
There are some things that individuals who are struggling with debt can do to help themselves. First, they could seek additional income to make it easier to pay down debt balances or keep up with monthly payments. It may also be worthwhile to look into ways to consolidate or refinance current debt balances. A higher credit score could also be a tactic used to obtain access to loans at lower interest rates.
Individuals who cannot pay their bills each month may be a candidate for bankruptcy. In a bankruptcy proceeding, debts may be reorganized or discharged in full. In a Chapter 13 proceeding, an individual makes payments to creditors over a period of three or five years. While a bankruptcy case is open, creditors generally cannot contact debtors or make efforts to repossess property. Doing so may be in violation of the automatic stay granted when a case is filed.