On behalf of Trenton Grand of Grand Law Firm posted in chapter 13 bankruptcy on Friday, December 7, 2018.

Louisiana residents have contributed to the nearly $4 trillion in debt that Americans owe collectively. About $1 trillion of that debt is attributed to credit cards with another $2.93 trillion from other debts such as auto and student loans. Mortgage balances are not considered to be part of the $3.93 trillion figure. According to LendingTree, credit card balances are expected to increase by 5 percent through the end of 2018, which could bring that number right to the $4 trillion mark.

That would represent a $1 trillion increase in debt since 2013. While recent growth in consumer debts may worry some, an economist from LendingTree isn't that concerned. It was noted that Americans have put $2.5 trillion more in the bank than they have on a credit card or into a vehicle. Furthermore, homeowners have $10 trillion more in home equity than they did in 2008 while incomes are also growing at a strong rate.

However, individuals are encouraged to keep an eye on their own spending levels. This is because credit cards carry an average interest rate of 16.6 percent, which is 3 percent higher than in 2016. That equates to an extra $120 in interest on a $4,000 balance. It is possible that interest rates could continue to rise, which may lead to an increase in delinquency rates.

Individuals who are worried about not being able to pay their bills may benefit from filing for Chapter 13 bankruptcy. Bankruptcy typically allows for an automatic stay of creditor contact, which could postpone a foreclosure or repossession until the case is over. Debtors may have leverage to renegotiate the terms of a mortgage or other secured loan. It may also give debtors time to sell assets before they are repossessed by creditors when a case ends.

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