That’s A Lot of Debt!

“It was the best of times. It was the worst of times.”  These famous opening lines from the Dickens classic, “A Tale of Two Cities,” described life during the 18th Century French Revolution, but are widely regarded as evergreen—enduring in their relevance throughout time.  Today, in many ways, it is the best of times.  Our phones fit in our pockets, contain a limitless trove of information, and there’s an app to do almost anything—even make phone calls. Cars can drive themselves.  It’s the Golden Age of Netflix and streaming media. And there have been over 40 different varieties of M&M’s created.  Truly, what a time to be alive.

But in at least one way, it is the worst of times.  According to a recent Bloomberg article, citing data from the Federal Reserve, credit card debt in the United States has reached a record high.  At the end of 2018, Americans owed $870 billion—with a B—in credit card debt.  That’s a lot of debt.  The new record eclipsed the previous record set in 2008 during the economic recession.

Whether that means another recession is on its way is a topic open to debate.  However, the majority of that debt is not seriously delinquent, and is likely to be paid back over time.  The article found that approximately 37 million accounts were delinquent by more than 3 months, according to how the accounts were reported to the credit bureaus. Those delinquent accounts supplied a total balance of about $68 billion.  That number is still nothing to sneeze at, but paints a less dire picture, where it is only about 8% of the $870 billion figure.  Maybe not the worst of times, after all.

Still, of the four largest types of debt, credit card debt was the fastest-increasing in the last several months.  Though credit card debt accounts for the fourth largest total, behind auto debt (3rd), student loan debt (2nd), and the biggest: mortgage debt.  The article found that more seasoned Americans (age 50 and over) were more vulnerable to delinquency.  Of course, it can happen to anyone.

What does this mean for consumers who find themselves in the unfortunate circumstance of falling behind on a credit card?  It may depend on who the creditor is.  There are the best of creditors, and there are the worst of creditors.  No matter how much you try to work with a creditor, they may still come after you, asking “Please, sir, I want some more.”  If a consumer is unable to pay what the creditor asks, they may find themselves getting hit with a lawsuit.  A consumer on the receiving end of a lawsuit may soon after find a judgment entered against them, if they don’t know how to navigate through the legal system.  It can be a difficult course to chart without the help of a capable attorney.

But you don’t need to wait until then to get help.  Even if a debt is not (yet) in litigation, we can help negotiate with creditors, who are often more willing to work with attorneys, because they know we have experience and knowledge of the legal system on our side.  And with all the creditors having such Great Expectations (last Dickens reference!), consumers should have all the help they can get.

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Joe Panvini

Joe Panvini

Joe received his law degree from the Sandra Day O’Connor College of Law at Arizona State University in 2010. On behalf of consumers, he has successfully briefed and argued complex consumer law issues in both individual and class action lawsuits. Joe is admitted to practice in Arizona and Washington, as well as numerous federal courts across the country, including the Ninth and Eleventh Circuit Courts of Appeals.
Joe Panvini

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