Household Debt Significantly Increasing
The total household debt during the last quarter of 2016 increased to $12.58 trillion. This is a 1.8% increase in just three short months. This is the largest increase for any one quarter of a year in three years. This debt is less than 1% of the peak household debt back in 2008.
The report measured both housing and nonhousing debt. It was determined that every type of debt increased during this recent surge. Mortgage debt rose by 1.6%, 1.9% for car loans, and 2.4% for student loans. Credit card debt increased the most with 4.3% increase.
As expected, the rise in credit also brings a rise in debt delinquency. Missed payments over 90 days are considered delinquent. The delinquency rates for credit cards rose by 7% in the last quarter of 2016. Missed payments on car loans rose by 3.6% and student loans a hefty 10.9%!
What is going on?
The increase in debt isn’t crystal clear. Mortgage debt rates rose less than expected and also had a lower delinquency rate. This is opposite of the household debt peak of 2008 when the housing bubble burst. It seems as though mortgage lending has stabilized in recent years. On the other hand, credit card and private student loan companies have been handing loans out like candy. Reckless extensions of loans are at least partially to blame for this debt increase.
Where do I go for help?
If you are one of many people looking for debt help start by getting professional help. The debt relief process can be complicated. Contact a bankruptcy attorney in Sacramento to discuss your options. You need the counsel of a professional in order to make an educated decision.