Understanding the Different Forms of Debt

 Posted on December 16, 2014 in Bankruptcy

Many Americans are aware different types of debt exist, but may not know some forms of debt are more manageable than others. The type of debt also can affect an individual’s options when trying to file bankruptcy.

According to Investor Place, the average American citizen carries $225,000 or more in debt. This accounts for America’s total debt in credit cards, mortgages, and various loans, as well average interest rates and the percentage of citizens with more than $500 put away in a savings account.

Credit Card Debt

Debt from credit cards is incredibly common. As an unsecured form of debt, banks and lenders consider an individual’s credit score when determining eligibility for credit cards and their credit limits. Unfortunately, high interest rates can make credit card debt escalate quicker than most people realize. Also, having too much debt on a card—even if the card has not reached its limit—can reflect poorly on one's credit score.

The key to managing credit card debt is to keep balances about halfway below the spending limit and to meet or exceed each monthly payment. This will go a long way toward building good credit, making an individual appear reliable.

Debt from Loans

There are a variety of loans available to the average consumer. Auto loans, business loans, and mortgages are some of the most common.

If you are struggling to keep up with high amounts of debt from credit cards, loans, or a combination of both, bankruptcy might be a viable option. As an experienced and trustworthy Texas bankruptcy attorney, Chance M. McGhee is ready to help those struggling under crushing amounts of debt. He has been refining his understanding of bankruptcy law for the past 20 years. Contact the San Antonio Law Offices of Chance M. McGhee today at 210-342-3400 for a free consultation.