Half in US have more credit card debt than savings, according to study

February 25, 2014 (Press-News.org) Half in US have more credit card debt than savings, according to study

Article provided by Richard Banks & Associates
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A survey conducted by the consumer finance information website Bankrate.com in February 2014 revealed that almost half of people in the U.S. have more credit card debt than money in savings. Those overwhelmed with credit card debt may want to consider how bankruptcy can help them reorganize their finances.

Low levels of savings

According to the survey, 49 percent of those in the U.S. do not have enough money in their emergency savings to pay off their credit card debt. This is the highest number of people with an unfavorable savings-to-debt ratio since Bankrate.com began tracking this information in 2011. Almost 30 percent of those polled have significantly more credit card debt than money in emergency savings, which is the highest percentage in four years.

People are saving less money overall. Of those polled, 17 percent reported that they had no emergency savings at all. The U.S. Department of Commerce reported that personal savings dropped to 4.2 percent in November 2013, which is near the historic low of under 3 percent in December 2007. A study completed by the Corporation for Enterprise Development revealed that 44 percent of U.S. households are "liquid asset poor," which means that they have less than three months' worth of savings. Analysts attribute the decline in savings and increase in debt-to-savings ratio to the slow economic recovery causing long-term unemployment and stagnant wages for many.

Bankruptcy may help

Those with little or no savings and high debts may want to consider how bankruptcy can help them address their financial problems. The automatic stay on debt collection that the court issues when a person files a bankruptcy petition can protect people from creditor harassment, wage garnishment, vehicle repossession and even foreclosure. People can discharge many unsecured debts by filing bankruptcy, freeing up future income to make themselves more financially stable.

Talk to a lawyer

Credit cards bills and other debts can make people feel overwhelmed, particularly when people do not have any money in savings. Such debts also prevent people from every being able to build up an emergency savings and become financially secure. However, people do have options to help them eliminate their debts. If you have questions about whether bankruptcy is appropriate for your circumstances, speak with a seasoned Tennessee bankruptcy attorney who can review your situation with you and advise you about the best course of action.