Debt is a problem for many Indiana residents. That can stem from many sources. Researchers and consumer advocates seek information about these overwhelming debts to try and help people find viable solutions. One recent policy brief from the Indiana Institute for Working Families gathered information about debt, collections and how people can be helped if they unsure of what to do. This can be crucial to getting into a better financial situation, possibly via bankruptcy.
Analysis of debt in Indiana shows residents’ financial challenges
Nearly 5,900 people took part in a survey so the Indiana Community Action Association (INCAA) could gauge how debt is impacting people across the state. The participants were given six options to categorize their debt. It found that 47% of respondents stated they owed medical debt. Sixty-four percent said they were dealing with student loans that surpassed $10,000. Almost half said they had a minimum of one debt in collections. Twenty-three percent had at least two debts that were sent to collections. Some had run into financial turmoil because they needed to take out payday loans. These loans tend to have exorbitant interest rates, making their financial circumstances even more tenuous.
From 2019 to 2020, debtors were confronted with a 3% increase in debt across the United States. In Indiana, it was 3.6% and spiked by around $8 billion. Those who were not dealing with mortgage debt were frequently saddled with a steady rise in credit card debt, student loans and auto loans. This increase has doubled in the last 15 years. Hoosiers who became delinquent in their debts stayed about the same since 2015. This is believed to have been due to stimulus payments and other steps the government has taken to stem the tide because of the ongoing crisis. Still, that will not last forever and people should be prepared for the future by weighing all available strategies.
Understanding how bankruptcy might help with overwhelming debt
Despite attempts on the part of consumer advocates and legislators to help those who are dealing with massive debt, many are unsure of their alternatives. Those who are fearful and are receiving constant calls and letters from their creditors should know about the benefits of bankruptcy. Whether it is a Chapter 7 liquidation or a Chapter 13 repayment plan, filing for bankruptcy might be worthwhile to clear unsecured debt like medical costs and credit card bills. It can help with saving a home and getting back on stronger financial ground. Before dismissing the idea out of hand, it is useful to have guidance on its positive attributes. Consulting with those experienced in debt relief can explain the process and help with forging a plan.