From many different important metrics, the U.S. economy has been doing well lately – but the experience of the average consumer isn’t necessarily reflective of that perspective.
In general, housing costs are soaring, fuel costs have stayed elevated for a while and food costs have spiraled up higher than almost anybody anticipated. Consumers have been cutting back on all kinds of discretionary expenses – but it’s not been enough to keep bankruptcies at bay.
Household debts are at record highs
There’s been a lot of economic and social turmoil over the last few years, and numerous different employment sectors have been hit with surprise closures and layoffs. Households that have always been financially stable in the past are suddenly struggling. That’s caused a lot of people to rely more heavily on their credit cards than before, and household debt to reach a record $17.3 trillion in 2023.
It’s not surprising, then, that consumer bankruptcies also rose 18% between 2022 and 2023, and they’re predicted to rise even higher in 2024. The consensus is that people are simply running out of savings – and the hike in interest rates that came as a part of inflation control has made borrowing money more expensive and harder to manage.
All this is to say that, if you’re among the many people out there who are facing unprecedented financial troubles, you’re not alone – and you haven’t done anything wrong. The conditions of the last few years have combined in such a way that the economy may be broadly healthy, but the average consumer’s wallet is simply bare. If you’re no longer able to keep up with your debts and pay your monthly living expenses, it may be time to explore bankruptcy for yourself.