The pandemic has caused financial turbulence in most American households. However, not all debt has been affected equally.

Credit Cards

A recent survey of consumer borrowers found that 1 in four people say the pandemic has pushed them to take on more credit card debt. In addition, nearly 80% of credit card holders say they aren’t going to be able to afford even their minimum payments going forward.

Student Loans

Federal student Loan debt totals more than $1.6 trillion dollars. Prior to the pandemic 1 in 7 borrowers were delinquent and two-thirds were only paying interest each month. Trump recently signed an executive order deferring all federal student loan payments until January of 2021. Although the executive office does not have the authority for such an order, it appears highly unlikely it will be objected to at this point.

Auto Loans

The Auto Loan industry has seen a recent decline in delinquent accounts due to a combination of forbearance programs and stimulus funds. Auto loan balances rose by $15 billion dollars from the previous quarter. Some attribute the stall in the rise of auto loan delinquencies to mortgage forbearances being so accessible. Consumers are falling delinquent on their auto loans at a slower rate than their mortgages.

Mortgages

One in three people can’t afford to pay their rent or mortgage this month. The vast majority of mortgage loans are currently 30 days late. In the coming months, many of these forbearance programs will be exhausted and expire.

If you are struggling to make minimum payments or facing foreclosure, contact your Stockton bankruptcy attorney at 209-952-0355.

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