Many young adults who live in the Baton Rouge area and other cities across the United States area are already in debt with a large percentage not being of the legal age to drink. This age group is known as Generation Z or those who are between the ages of 16 and 20. The average debt of these young adults is about $4,300. Young adults who are between 21 and 25 are in debt by about $11,000 each with the amount being higher if they don't have as much financial aid as others while attending college or if they attend a university that is a bit more expensive than others.
The amount of money owed by households in Louisiana and around the country to banks and credit card companies fell sharply in the wake of the 2008 financial crisis and remained fairly stable during the ensuing recession, but figures from the U.S. Federal Reserve reveal that it has now surpassed its pre-crisis levels. Household debt in the United States climbed to an all-time high of $13.2 trillion by the end of March 2018 according to the nation's central bank, and most financial experts expect this figure to rise even higher in the months and years ahead.
Households around the country with revolving debt balances owe an average of $6,081 to credit card companies. Paying this debt off can be difficult for Louisiana consumers who are struggling to meet their financial obligations, and many credit card holders are only able to make their minimum monthly payments. Credit card minimum payments are usually $20 or $25 when revolving balances are low, but they climb to 2 to 3 percent of the outstanding amount when debt levels rise.
Louisiana consumers who are trying to increase their credit score should refrain from carrying a credit card balance. As a general rule, doing so has no bearing on a person's ability to establish good credit. Instead, it results in a person paying interest unnecessarily. The average credit card interest rate is over 16 percent according to data from CreditCards.com. Those who carry too large of a balance on a credit card could actually put themselves at risk of lowering their score.
It's only natural for people to want to put off filing for bankruptcy, mainly because it's often seen as a sign of failure or viewed as something meant to be a last resort. However, a law review study suggests that the longer individuals wait to file bankruptcy, the more their personal and financial well-being may be affected. What this could mean for debtors in Louisiana considering bankruptcy is more of a struggle with getting a fresh start.
People in Louisiana overwhelmed by their debts have the option of pursuing bankruptcy protection under the provisions of Chapter 13. A Chapter 13 bankruptcy requires a debtor to develop a payment plan based on current income. A bankruptcy court will review this proposal, and, if approved, direct the trustee to collect payments from the debtor for three to five years.
People in Louisiana currently making payments as part of a Chapter 13 bankruptcy sometimes need to buy a vehicle. Because a Chapter 13 payment plan lasts three or five years, the legitimate need for a car could arise during that time. Bankruptcy law includes a process for financing a vehicle. A person must first arrange for a loan and then file a Motion to Incur Additional Debt so that the court can approve or deny the request.
Louisiana residents and others who are thinking about filing for bankruptcy can generally choose between filing for Chapter 7 or Chapter 13 protection. In a Chapter 7 case, eligible assets are sold with the money used to pay off as much debt as possible. In a Chapter 13 case, debts are reorganized and paid over a period of time. It is important to note that not all debts can be eliminated in a bankruptcy proceeding.
When store employees offer a discount or other benefit for signing up for a store credit card in Louisiana, many consumers find the offer tempting. However, the delinquency rate on these store-branded cards has reached its highest point in seven years according to a report from Equifax, the credit reporting bureau. These store-affiliated credit cards have their highest rate of delinquencies since 2011, the bureau said. Approximately 4.65 percent of these accounts are at least 60 days overdue for a payment, an increase from 4.08, the rate of delinquency reported in March 2017.
Americans are on pace to hit $4 trillion in consumer debt by the end of 2018 according to LendingTree. In 2010, they had non-mortgage debt equal to 22 percent of their income. Today, that number is 26 percent, and over the past two years, consumer debt totals have increased by 5 to 6 percent. Auto loan and credit card debts have increased by 7 percent on an annual basis.