Credit card debt, loans and other expenditures deplete savings

Pittsburghers and people across Pennsylvania will be well-acquainted with debt no matter their situation. Even those who have a good job and have a commensurately good salary will have various debts. For those on the lower rungs of the economic ladder, it is often necessary to accrue debt to attend school, purchase a home and make ends meet. However, various expenditures -- credit card debt, student loans and mortgages -- are increasing. It is at the point that people are unable to save significant money in bank accounts or make investments, if they can do that at all. As debts rise and problems come up, it can leave debtors in desperate financial straits.

If, for example, a person is barely making the minimum payments on debts every month and a sudden medical issue forces them to enter the hospital or they lose their job, they can find themselves well behind on their payments. This is a cycle that is difficult to escape. The lenders are aware of the danger Americans are in and how they are forced to use credit cards, lines of credit and refinancing to stay one step ahead and purchase needs and wants. They will make offers that debtors accept and will rapidly make their issues worse.

Currently, the economy is strong and that has sparked more buying and borrowing. But, as is seemingly inevitable, the bubble can burst at any moment and a recession can come about. Without significant flexibility, those debts can send a person's finances into a tailspin. Statistically, the first quarter of 2019 showed an increase in consumer debt to $13.7 trillion. Mortgage debt is at $10 trillion and student loans at $1.5 trillion. When medical problems, unemployment, divorce or a catastrophe occurs, people will have immediate desperation on how to get back on stronger financial footing.

For those already in financial trouble or who see such problems on the horizon, it is imperative to understand that there are options to clear debts or to craft a reasonable payment plan with the available bankruptcy laws. Chapter 7 is a liquidation and Chapter 13 is for those who have an income and want to retain a home, a vehicle and other properties. To clear credit card debt or reduce what is owed to something manageable, it is wise to act early rather than wait until the situation is at its worst.