Household Debt – Still at Historic Levels
Household consumer debt continues to climb with no end in sight. Back in August of 2022, I discussed the Federal Reserve Bank of New York report showing at that time US household debt exceeded $16 trillion for the first time in history during the 2nd quarter of 2022. Currently, the most recent report shows that US household debt now stands at $17.69 trillion as of the 1st quarter of 2024.
Consumer Debt Continues to Rise
Unfortunately, household credit defaults have shown an increase over the last 2 years, particularly credit cards and auto loans. All categories of consumer debt delinquencies have increased and are now at or above the pre-pandemic levels set in 2019. Americans collectively have over $1.12 trillion in outstanding revolving credit card debt, up significantly from the $890 billion in 2022, and exceed the $930 billion previous record set in the final quarter of 2019 – the last quarter prior to the COVID-19 pandemic.
Bankruptcy filings nationwide have also picked up over the last 2 years. Total case filings over all chapters total 467,774 as of the end of March 2024, a 4.7% increase over 2023 and an 8.4% increase over 2022. Although still historically on the low end, the case filing numbers show an increasing pace of filings.
Inflation since 2022 has most assuredly contributed to the continuing increase in household debt levels. Rising prices on home purchases (mortgage amounts), automobiles, gas and groceries, along with rising interest rates appear to be the driving factors of the continuing increases in outstanding household debt.
Consumers and Businesses Can Find Debt Difficult to Manage
Balance transfers are a mixed bag. Transferring balances from higher rates to lower rates makes a lot of sense, so long as the outstanding balances are paid down at the lower rate. Simply shifting debt around from account to account to take advantage of lower rates is a recipe for long term financial difficulties. Making only minimum payments while continuing to use accounts almost always leads to financial difficulties down the line.
A Bankruptcy Attorney Can Help
One thing that has always been clear – the sooner a financial difficulty is addressed, the better the outcome. Whether you are an individual consumer or a business owner/operator, the lawyers at MCCM have guided clients through difficult financial times with the expertise that comes with decades of proven results.
If you would like to schedule a consultation to talk about bankruptcy or debt relief, please feel free to contact Mikal Krueger at mkrueger@mccmlaw.com or give him a call at 585-512-3546.
MCCM has three of the most preeminent attorneys in Western New York for bankruptcy matters. Lucien A. Morin, II, Douglas J. Lustig and Mikal J. Kruger are available for consultation for personal or business related debt relief. Contact them today at 585-546-2500 to schedule a consultation.
This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.
About MCCM
McConville Considine Cooman & Morin, P.C. is a full-service law firm based in Rochester, New York, providing high-quality legal services to businesses and individuals since 1979. With over a dozen attorneys and a full paralegal support staff, the firm is well-positioned to right-size services tailored to each client. We are large enough to provide expertise in a broad range of practice areas, yet small enough to devote prompt, personal attention to our clients.
We represent a diverse range of clients located throughout New York State and New England. They include individuals, numerous manufacturing and service industry businesses, local governments, and health care professionals, provider groups, facilities and associations. We also serve as local counsel to out-of-state clients and their attorneys who have litigation pending in Western New York courts. For more information, please contact us at 585.546.2500.