Household debt has been growing for over a decade, but it does not all come down to consumer spending. Much of the consumer debt that people in Connecticut now live with is the result of borrowing just to survive the ongoing aftermath of the Great Recession. Experts are cautioning that the growing household debt could cause serious problems for some people should the country hit another recession. Economic decline could be a common factor among those who choose to file for bankruptcy.
Many people borrow money out of necessity rather than for frivolous expenditures. Since the end of the recent recession, people have been borrowing at higher and higher rates, causing consumer debt to balloon to record highs. These debts are often student or auto loans, mortgages and credit card balances. When those affected by the recession could not find new, better-paying jobs, many ended up borrowing money just to pay the bills.
Individuals who are in the bottom half of America’s wealth distribution are especially burdened by these debts. Data from March 2019 shows that households in this wealth bracket have an average of $33,693 in debt. This is $6,136 higher than June 2009, when the 2007 recession was officially over. This growing consumer debt has some experts worried that another recession could be on the horizon.
Overwhelming debt can be a problem at any time, not just during economic downturns. Connecticut consumers who are living with more debt than they can handle probably understand this well, but may be confused about their options. In many situations, filing for bankruptcy can help a person discharge his or her debts, paving the way for a future in which financial stability is possible.