Eugene Bankruptcy Law Blog

Young people in Oregon and across the country are facing an increasing debt burden. According to statistics from the New York Fed Consumer Credit Panel and Equifax, people between the ages of 18 and 29 owe $1.05 trillion in debt. While student loans comprise a substantial amount of this debt, other common burdens include credit card debt, auto loans, mortgages and other types of loans or consumer credit. This marks an increase in debt among this demographic, which last owed this much money in the last quarter of 2007. The trend at that time was later disrupted by the 2008 financial crisis.

Of course, young people are not alone. People between the ages of 30 and 39 owe $2.9 trillion in debt while people aged 40 to 49 owe $3.4 trillion in debt. People between 50 and 59 years of age owe $3.2 trillion, those 60 through 69 owe $2 trillion, and those 70 and up owe $1 trillion in debt. This means that the youngest and oldest Americans have approximately the same collective debt burden. Student loan debt, which has been widely recognized as a national crisis, amounts to $1.5 trillion of all personal debt, affecting 44 million people. Some expect that 40 percent of borrowers may default by 2023.

Medical debt is a factor in about two-thirds of personal bankruptcies filed in Oregon and around the country according to a study published recently in the American Journal of Public Health. The analysis of approximately 530,000 families pushed into inescapable debt by illness or injury is seen as significant as it is the first major study of its kind conducted since the passage of the Affordable Care Act in 2010. One of the primary goals of the landmark health care bill was to reduce and prevent medical debt-related bankruptcy filings.

After scrutinizing 910 personal bankruptcies filed between 2013 and 2016, the researchers discovered that medical bills prompted 58.5 percent of the petitioners to seek debt relief. Income losses caused by an injury or illness were cited as a reason in 44.3 percent of the bankruptcy cases, and many petitions revealed that both hospital expenses and lost wages played a role.

Getting into credit card debt can feel scary and intimidating, but it does not have to be this way. Sometimes the best way to handle credit card debt is not getting into it in the first place. However, this can be difficult. Unfortunately, this type of debt can be easy to get into. But there are tips you can use to avoid it.

How can you avoid debt?

In Oregon and throughout the country, older Americans are filing for bankruptcy at a higher rate than their younger counterparts. Part of the reason is that government benefit programs such as Social Security are replacing a lower portion of a worker's income after retirement. At the same time, health care costs are going up, which can further strain the finances of someone 65 or older.

It has been noted that the age group most likely to seek bankruptcy protection today has also been most likely to seek such protection in the past. According to the Consumer Bankruptcy Project, the age group with the highest level of bankruptcy filings in 1991 was between the ages of 25 and 44. Between 2013 and 2016, those same individuals were in the age group most likely to to do so. At that time, they were between the ages of 45 and 64.