Although America is known as the “land of the free,” three out of every four American families are in debt and not truly free. In Hawaii, Colorado, and multiple states along the east and west coasts, the average family is well over $100,000 in debt. Due to rising education, health care, automobile, and homeownership costs, debt is on the rise in the rest of the country as well.
A typical family brings home $50,221 per year and has thirteen credit cards. These families are living well beyond their means just to stay afloat, while the average American CEO’s salary continues to rise. In 2010, CEOs made $8,050,000–over 160 times the salary of the average family!
The debt crisis began to develop in the 1980s, when the cost of education began to steeply increase. This trend continued into the 1990s and 2000s, accompanied by ballooning health care costs. Between 1989 and 2010, credit card debt increased by over $2,000 per family.
Other major contributors to the debt crisis are the cost of homeownership and rising automobile costs. Most American families have over $100,000 in mortgage debt, $24,000 in home equity loans, and $14,400 in vehicle-related debt. It will take many homeowners twenty-three years (or more!) to pay off their home loan and over five years to pay off a vehicle loan.
The rapidly rising cost of the above necessities has lead to an increased dependence on “borrowed” money, leaving Americans more in debt than ever.
Author Jason Lancaster writes for Wink and Wink, a law firm with seasoned Denver Chapter 7 Lawyers. Wink and Wink is devoted to helping Americans in financial trouble and can help find Colorado bankruptcy exemptions to help distressed people keep most of their property.