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New economic statistics suggest need for debt relief

Washington residents may be aware of recently released statistics concerning the total level of household debt among American consumers. It is estimated that total household debt has reached a new high of $12.7 trillion. That level is higher than the total debt held in 2008 at the beginning of the collapse of the global financial system, and could mean that debt relief is a growing need for many households.

Economists often relate high levels of household debt with economic stability. However, not all debts are the same. For example, it is estimated that 10.6 percent is accounted for by student loans. Getting an education is always a positive choice, but when new graduates are saddled with high student loan debt burdens, they often postpone significant milestones such as purchasing a new house, car or other big-ticket items. That can stunt economic growth, which can have an impact on the economy as a whole.

Credit card debt poses another problem. Unlike student loans, where borrowers have something of value to show for their investment, credit card debt is more insidious in nature. Borrowers often have little or nothing to show for their spending. Economists warn that there is a risk of credit default that accompanies the newly released debt statistics.

Looking at national trends certainly has a value, but for many Washington consumers, debt levels are a subject that hits close to home. When a family is struggling to repay mounting financial obligations, a number of negative effects often follow. Finding a path toward lasting and effective debt relief is a top priority. Fortunately there are numerous debt relief options available to Washington consumers, once they are ready to take the plunge and begin to work toward a more financially stable future.

Source: The New York Times, "Household Debt Makes a Comeback in the U.S.", Michael Corkery and Stacy Cowley, May 17, 2017

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