While some believe that middle class is defined by economic resources, others say it is a state of mind revealed through behavior, cultural tastes, or certain kinds of consumption. Whatever your take, staying in the middle class is getting more expensive and financial stress is running high across the nation.
As cars, homes and healthcare skyrocket, wages have remained stagnant. But, that hasn’t stopped consumers from piling on more debt. According to a recent Wall Street Journal article, consumer debt has climbed to $4 trillion. Last year, student loan debt totaled 1.5 trillion; auto loan debt hovered around 1.3 trillion; unsecured personal loans and credit card borrowing are on the rise.
On the bright side, taking on debt signals consumer confidence in the future. However, there are always economic risks in taking on debt to maintain a middle class lifestyle. Any ripples in the currently low unemployment can result in missed payments that are difficult to catch. Unexpected expenses such as a medical emergency or home repairs on top of an already tight budget can derail a family’s finances quickly when they carry a lot of debt.
Millennials know the liability debt presents all too well. Many are still tackling student loan debt from their days in college, while trying to afford the trappings of a middle class life. Juggling a mortgage or rent, daycare expenses for children, and a car loan, all the while paying off loans or credit card debt, millennials are certainly feeling the squeeze. The emerging picture is one of borrowing to make ends meet now with the realization debt can undermine their future.
From financially-strapped older Americans approaching retirement to the millennial generation borrowing to achieve a middle class lifestyle, overwhelming debt is all too real. For many, bankruptcy protection may be a good strategy to solve their difficult financial situation. A chapter 7 bankruptcy can erase unsecured debt and providing a chance to start anew. For others, who may have have higher earnings and assets they want to keep, a Chapter 13 repayment plan might be a solution. The first step is getting the information you need to make an informed financial decision – contact the Peoria bankruptcy law offices of Charles E Covey for answers today.