Many Louisiana consumers are struggling with credit card debt that is difficult to repay. On average, Americans have around $38,000 in personal debt, not including home loans. When financial circumstances change, it can seem impossible to handle debt repayment at all, and late fees and other penalties may begin to add up. In addition, when people make only the minimum payments on their credit cards, they continue to face escalating debt due to interest, even if they do not make any new purchases.
Louisiana women with mounting credit card debt are not alone in their struggles. Even though Americans of all genders are widespread users of credit cards, more women credit card holders are concerned about their ability to repay their mounting debt burdens. Across the country, credit card debt is at the second-highest point it has been since 2008, when a major financial crisis shook the American economy. Indeed, in one quarter in 2018, Americans accumulated $30 billion in personal consumer debt.
Younger Louisiana residents may be more likely to fall into medical debt than their older counterparts. A study that appeared in the journal Health Affairs found that from the age 27 to 64, the size of medical debt went down almost 40 percent. This could be because older people have had more time to build up resources, and many are eligible for Medicaid. Younger people may also have more limited insurance with large deductibles.
Louisiana residents may think that their credit scores are only negatively impacted by late payments, exceeding credit limits or other related mistakes. However, even seemingly innocent actions like applying for a new credit card or loan can put a negative mark on a credit report.
When financial hardships strike Louisiana residents, house payments often suffer. Missing mortgage payments will prompt a lender to initiate the foreclosure process after 90 days of delinquency. People in this situation might resolve the problem by working with their lenders or pursuing bankruptcy protection.
Debtors in Louisiana who suffer from harassment by debt collectors have legal recourse. While these companies are within their legal rights to contact consumers about delinquent accounts, any harassment that they conduct is illegal. Those that engage in harassment can be reported to the Federal Trade Commission and can be subject to punitive action.
For Louisiana residents and others with credit card debt, an increase in the federal funds rate can lead to higher bills. This is because the fed funds rate and credit card interest rates are linked together. In March 2018, the Federal Reserve increased this rate to 1.75 percent. While other debts can be impacted by changes to this rate, credit card balances are the most likely to be subject to variable rates.
Bankruptcy might offer relief to people overwhelmed by multiple debts in Louisiana, but tax debts often do not qualify for discharge. Bankruptcy laws, however, contain numerous exceptions to general rules, and certain circumstances could make the discharge of a tax debt possible.
People in Louisiana confronted by high medical bills should investigate whether their hospitals offer assistance to people unable to pay. Some hospitals that accept government funding have an obligation to set up charity care funds. They usually do not promote the programs, but hospitals have billions of dollars available nationwide to help people challenged by high medical costs. According to the American Hospital Association, U.S. hospitals offered $38 billion in financial assistance to patients in 2016.
According to at least one nonprofit credit counseling service, the number of people seeking help with debt has increased. Some Louisiana consumers could be among those who have mounting debt. Unfortunately, Americans have a pattern of feeling good when the economy is strong and loading up on debt that they then struggle to pay off during leaner times.