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Credit card debt on the rise

On Behalf of | Mar 10, 2017 | Bankruptcy

Credit card debt held by cardholders in Virginia and throughout the country is on track to grow to an all-time high of more than $1 trillion by the end of this year. This is accompanied by a nearly all-time low in charge-off rates.

The fourth-quarter debt added in 2016 was the highest since 2007. American consumers added more than $89 billion in credit card debt in 2016. The highest household debt occurred in 2007 and was $8,463. At the end of 2016, average household credit card debt reached the second-highest point at $8,377.

Some experts are concerned about the growing debt. They point out that the last time credit card debts were this high was shortly before the Great Recession and wonder how long it will be before there are serious consequences. In the meantime, however, it is predicted that lenders will continue extending lines of credit as long as consumers keep paying their bills.

People can incur significant credit card debt without being irresponsible. Life events such as divorce or illness can result in them having to rely on their credit cards to make ends meet. Individuals may reach a point where they can no longer pay their debts, and if this occurs, they might want to talk to an attorney about their debt relief options. This may include bankruptcy. Filing for bankruptcy is one way to stop creditor harassment. People who file for Chapter 13 bankruptcy may be able to work out a payment plan that allows them to keep some of their assets, and this could include a home and a vehicle. Bankruptcy can be a fresh start, and for debts that cannot be discharged in bankruptcy, such as student loan debts, filing for bankruptcy might free up the money to start paying off those debts as well.