Staggering U.S. Household Debt
It’s no secret that many Americans are drowning in debt. As the COVID-19 pandemic continues to impact communities across the world, countless individuals are facing a reduction in income or complete job loss. As a result, many people are struggling to keep up with their student loans, mortgage payments, credit card bills, and other debts.
In fact, data from the Federal Reserve indicates that the cost of living has increased by 19 percent while median household income has soared 41 percent over the past decade. This suggests that some consumers came into 2020 with breathing room in their budgets, but the pandemic caused financial turmoil. NerdWallet’s 2020 American Household Credit Card Debt Study specifies that 2020 saw higher overall household debt and income losses for millions of people across the nation. While credit card debt balances dropped by more than six percent, other types of debt, including mortgages, auto loans, and student loans, increased from 2019 to 2020.
Fortunately, if you’re struggling with the weight of household debt, relief may be right around the corner with a debt relief attorney. The lawyers at McCarthy Law intimately understand the stress of household debt—especially for those struggling to make ends meet during the COVID-19 crisis—and are dedicated to fighting for your financial freedom.
Breaking Down U.S. Household Debt Numbers
NerdWallet’s 2020 study breaks down the average U.S. household debt into the following categories:
- $145,085 in total average debt
- $7,027 in average credit card debt
- $190,595 in average mortgages
- $27,852 in average auto loans
- $56,572 in average student loans
The study articulates several suggested explanations to account for these high household debts. Perhaps most importantly when discussing debt in 2020, it’s impossible to ignore how COVID-19 has affected Americans’ finances. The study found that of those who say their household financial situation has gotten worse since the pandemic began, 63 percent say they feel it’s worsened because they lost their job or their household income decreased overall.
Likewise, income has outpaced the cost of living over the past 10 years. For instance, while median household income has increased by 41 percent since 2010, medical costs and food and beverage prices have increased. This disparity between the level of income and cost of living may be directly correlated to these high household debts.
Another explanation may be because consumers vastly underestimate or under-report how much debt they have. While a majority of this under-reporting may stem from a true lack of knowledge, a portion may result from the stigma that still surrounds credit card debt to this day. However, this stigma must be confronted head-on to avoid falling prey to these overwhelming debts.
Steps You Can Take to Reduce Your Household Debt
It’s important for consumers with household debt to protect themselves. The first place to start is to review a copy of your credit report. We recommend that you go to AnnualCreditReport.com to do so as it’s quick, easy, and free. Once you have a copy of your credit report, educate yourself by reviewing every single item listed. This is your financial profile, so you can never be too safe. Oftentimes, there may even be errors on your credit report holding you back from reaching your financial goals, so a thorough review is key.
Upon review, you can prepare a personal savings plan for yourself to abide by. For instance, you could devise a more aggressive payment plan for your Chase credit card to pay it off sooner, or you may simply decide that buying a new vehicle is not a good decision for you right now. Either way, knowledge is power, so take the time today to educate yourself and plan for financial peace.
Not only is it possible to reduce your debt, but the tools to do so are right at your fingertips—starting with McCarthy Law PLC. Among other debt relief options, McCarthy Law PLC can help you negotiate directly with your creditors to significantly reduce your debts and aggressively fights to remove errors listed on your credit report.
Contact a Debt Relief Lawyer at McCarthy Law
At McCarthy Law, we understand the overwhelming burden of household debt and are committed to helping our clients find relief. When you contact our experienced team, we’ll help you explore the best options for getting on top of your finances. A skilled attorney can provide you with practical legal advice after fully analyzing your situation and determining the most effective solutions.
The lawyers at McCarthy Law understand the anxiety that comes with household debt, especially for those struggling to make ends meet during the COVID-19 crisis. We’re committed to fighting for your financial freedom and helping you return to the debt-free life you once enjoyed. To schedule a free consultation with a knowledgeable and experienced debt settlement professional, call our office at (855) 976-5777 or complete our contact form today.
Updated on February 23, 2021
Kevin Fallon McCarthy
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