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As household debt increases, debt relief could be on horizon

The Federal Reserve released data revealing that the average debt held by U.S. households recently increased by about $51 billion. Altogether, household debt is now at a staggering $12.12 trillion. More in-depth information from the Federal Reserve also examines specific debts where those seeking debt relief might be suffering the most.

While household debt is somewhat lower than the 2008 peak of $12.68 trillion, consumers in Washington continue to struggle with repaying bills and digging themselves out of debt. In particular, student loans shot up by $29 billion, nearly 12 percent of which was at least 90 days past due at the end of 2015. Both auto loans and credit card balances also increased by $19 billion each.

In general, home owners might be doing somewhat better than in the past few years. As a nation, mortgages only account for $437 billion of all debt, although over 100,000 individuals had their homes foreclosed. Additionally, over 2 percent of mortgages were 90 days overdue, putting more home owners at risk for delinquencies and possible foreclosure in the future.

Even as the economy continues to recover from the recent recession, debt continues to be a daily struggle for so many people in Washington. In some instances, it can even interfere with the ability to provide for daily necessities such as food or housing. When harassing phone calls and incessant creditors begin to take over daily life, debt relief can become a necessity. While bankruptcy is not an appropriate choice for everyone, it can be a financial lifeline for those who are unable to repay their debts.

Source: Business Insider, "This is what $12.12 trillion worth of household debt looks like", Elena Holodny, Feb. 12, 2016

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