Bankruptcy — mortgages can make consumer debt worse

On Behalf of | Mar 3, 2020 | Bankruptcy

Buying a home is an accomplishment that homeowners should be proud of, but it is also an enormous undertaking. Houses require regular maintenance and upkeep, and since nothing in life is perfect, most homeowners in Connecticut can expect to deal with unexpected repairs at least once. When faced with these costs, homeowners usually end up taking on at least some consumer debt, which could ultimately lead toward bankruptcy.

Mortgages are not considered consumer debt, which are things like credit cards, medical bills and student loans. However, mortgages frequently contribute to consumer debt. In a survey by Discover, 14% of respondents said that home repairs were their biggest sources of consumer debt. Considering that 60% of adults in America say their debt is a burden, this only adds to the stress felt by the 12.4% who already say their mortgages are the biggest burden.

Consumer debt is not negligible, either. Household debt recently hit $14.15 trillion. According to Discover’s survey almost 50% of consumers owe anywhere from $1,000 to $20,000, and 10% owe less than $1,000. Only 11% of people in America do not have any type of consumer debt. These statistics do not even reflect most people’s largest source of debt of any type — mortgages.

Sometimes it is hard to see how one debt contributes to another until it is too late. So what might have started as a reasonable mortgage and a manageable amount of consumer debt may soon turn into far too much for a Connecticut consumer to handle. Bankruptcy could be an option for someone in this situation, especially if he or she is trying to prevent or stop foreclosure.