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Bankruptcy an option for skyrocketing household debt

People tend to have a very clear-cut view of debt. Some believe that too much debt is the product of poor financial planning and spending, while others think it is caused by emergencies and unexpected bills. Reality is a lot more nuanced than that, and Illinois residents find themselves in debt for all kinds of different reasons. But no matter the reason, most people can utilize the same solution — bankruptcy.

American consumers are struggling, and the new record high for household debt shows just that. In March 2020, household debt hit $14.3 trillion, higher even than during the financial crisis of 2008. At that time, the high for household debt was $12.7 trillion.

So where is all this debt coming from? While some might be quick to point to credit cards, balances actually fell by $34 billion between 2008 and 2020. But student loans and auto debt soared, going up by $27 billion and $15 billion respectively. Americans now owe $1.54 trillion in student loans, and nearly 11% of that is at least 90 days delinquent. Despite this, overall delinquencies for all debt is down almost 5%, which is perhaps a good sign that a lot of people are doing their very best to keep up with payments.

Everybody in Illinois has their own unique financial situation to deal with. But while their situations may be different, many people experience the same emotional burden of living with more debt than they can handle. That emotional and financial stress is sometimes best addressed through bankruptcy, which can help overwhelmed individuals address their debt head-on.