Debt Remains To Be A Central Part Of American’s Lives

May 25, 2012 - PRLog -- Debt is currently a major financer for most American expenditure, according to Peter Frost from My Credit Counseling

According to the Federal Reserve’s latest statistics, consumer debt in the United States amount to nearly $2.4 trillion, which would translate to an outstanding financial obligation of $7,800 for every person in the country, whether adult or child. Although this may be quite alarming, this is not at all surprising to learn given how the economic system of America had been over the last five years. If one would remember, a lot of money had been taken out of the system by laundering and mishandling of subprime mortgages. And this has forced majority of American companies and citizens to depend on federal debt up until today.

As of 2010, they ratio between debt payment and disposable income is at 11.9% - which implies that Americans spend almost 12% of their income to pay mandatory liabilities. Although seemingly insignificant, experts do not recommend that people get comfortable with trend as this may lead to further financial isntability. Peter Frost, a financial counsellor, explains that people can fight off the tendency to incur debt by not living beyond their means, saving and making educated plans and contingency plans for debt payment before a loan is taken up. It would also serve their best interest to learn more about the transactions they are involving themselves so they do not get trapped in absurd fees and interest rates.  

So far, there are four outstanding options people can utilize to give them a sense of relief from their increasing financial burdens – debt settlement, debt consolidation, and personal bankruptcy. Debt settlement entails the negotiation of the reduction of the balance to an amount the creditor finds reasonable and the debtor can pay in full. Debt consolidation, meanwhile, involves taking out one loan to cover all the other existing ones whereas personal bankruptcy denotes the filing of either Chapter 13 or Chapter 7 claim to completely rid oneself of any financial obligation towards debt payment. It is important to note that people are not entitled to use one or the other in specific circumstances. And that it is important that they get credit counselling first before they make their final decision.

If you are about to make a life-changing decision in line with your financial health, seek advice from experts and visit My Credit Counseling’s website at http://my-credit-counseling.com/.