In the last five years, many Americans have continued to take on more debt to the point of being slaves to their creditors. Currently, the average American household has a credit card debt of $ 15,799. It does not seem like a lot of money, but the average income is about $ 35,000 a year. This makes their credit card debt about 40% of their annual income. All you have to do is remove household expenses, pay a car, some medical bills and you do not have enough money to make more than paying interest on credit cards. It is a disease that is closely related to the American culture and that worsens it. Four years ago, the debt-to-income ratio was less than 50% and that figure is now 154%. This clearly shows that the reason why fewer Americans declare bankruptcy is not because the economy is better, but that more people are borrowing more to repay other debts. The old statement "Stealing Peter to Pay Paul" is alive today in most American households. Americans become slaves to their creditors to the point that they can no longer afford to keep a roof and pay creditors as well.
At this point in history, one would think that the government would follow the example, but the government is bankrupt and is becoming increasingly indebted every day. When the president took office, the debt-to-GDP ratio of the United States rose to 70%, this figure has now exceeded 104%. Speaking of spending, the federal government has accumulated more debt than the first 42 US presidents gathered during its last term. To put it in perspective, if we started to pay back the debt accumulated over the last four years to a dollar a second, it would take 184,000 years to pay it back. Let's face it, the US government and its citizens are on the verge of filing for bankruptcy historical proportions.
There is good news in all this crazy debt. Americans have the choice and can use judicial bankruptcy to break the cycle of debt slavery. Chapter 7 bankruptcy completely erases it and leaves the person virtually debt free of all unsecured bills, such as credit cards, medical bills and personal loans. It's a pretty powerful statement in a world run by plastics. Many people continue to try to turn things around because they can not live without credit. Our grandparents did it and so can we if we get in and change our attitudes. The federal government is trying to bail out its debt at the risk of devaluing the US dollar and impacting the middle class. At the moment, most Americans are barely making ends meet, and the rising cost of devaluing the currency could actually serve many of these people by forcing them into bankruptcy. Government regulations on bankruptcy are becoming more binding, it is time to file for bankruptcy and break the debt trap.