Previous to the COVID-19 world that we all find ourselves living in now, credit card debt was certainly already an issue. Household and consumer debt had already risen to historical highs and financial concerns had already taken hold for millions. This had also already extended to the over 45 million student loan borrowers responsible for paying back $1.64 trillion to both the federal government and private student loan servicers.
Health fears ensued around the world. In the US, as millions battled the coronavirus and hundreds of thousands died, finances came to the forefront—especially as unemployment grew to enormous, completely unexpected numbers. For so many, careers seemed to be crushed almost instantly—and household budgets were devastated. There was fear over getting sick, fear over how to pay the bills, and continued fear over what would happen in the future.
Surprisingly, a large percentage of Americans live paycheck-to-paycheck, without savings, and without that so often mentioned ‘emergency fund.’ Studies have shown, in fact, that only around 40 percent would even be able to pay for an unexpected expense of $1,000.
For those with credit card balances left untouched, many Americans suddenly found themselves maxing out their plastic—suddenly relying on an alternative income that runs out very, very fast. Making the issue further complicated, creditors expected to get paid back. In ‘normal’ times, they would expect to be paid back on time too. Since the arrival of coronavirus, however, much has changed on the financial landscape and creditors are more willing than ever to work with individuals who are having a difficult time, especially in the face of no income.
Still, recent news states that 44 percent of the 51 million consumers who were forced to increase credit card debt recently blamed it on the COVID-19 pandemic. Data from a recent survey also shows that those polled have lost their confidence in the ability to pay back credit card debt. Around 70 percent of Americans are currently trying to deal with paying off what is referred to as personal debt and not surprisingly, a large portion of that is dedicated to credit cards. Speak with an attorney as soon as possible if your debt is spiraling out of control, or if you have been served with a summons and complaint.Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (855) 709-5788, or email us at [email protected].