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Michael D. Hart, P.C.
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Consumer debt in the United States continues to climb

Consumer debt around the country reached an all-time high of $13.2 trillion in the first quarter of 2018, which prompted many financial experts to conclude that consumers in Virginia and throughout the U.S. have not taken the lessons learned during the financial crisis and ensuing recession to heart. These fears are bolstered by a personal savings rate, which measures savings as a percentage of disposable income that has fallen to its lowest level in more than a decade. Household debt levels in the United States fell significantly between 2008 and 2013, and Americans saved more than 10 percent of their earnings as recently as the 1970s and 1980s.

The rise in consumer debt has been made possible by years of historically low interest rates, but that era appears to be drawing to a close. The Federal Reserve has raised rates twice in 2018 and another two hikes are expected before the year ends, and studies suggest that increased borrowing costs are a burden that many Americans are unprepared for. According to research conducted by the Federal Reserve in 2017, 35 percent of Americans would be rendered financially insolvent by an unexpected $400 emergency.

The upcoming economic squeeze is likely to be felt most by those on limited incomes who are already struggling to keep up with spiraling health care and educational costs. Wages in several sectors have remained stagnant for years despite an improving economy and falling unemployment figures, and financial analysts are concerned that increased borrowing costs will cause many American workers to turn to their credit cards and sink even deeper into debt.

Harassing calls from bill collectors are a part of daily life for many Texas residents, but they do not have to be. Attorneys with debt relief experience could explain that filing a Chapter 7 or bankruptcy petition will result in an automatic stay being issued. This stay prevents creditors from making any further efforts to collect outstanding debts and puts an end to asset seizures and wage garnishments.

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Michael D. Hart, P.C.
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Roanoke, VA 24011

Phone: 540-627-6520
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