What Are the Most Common Types of Debt for Your Age Group?

With debt being such an overwhelming subject to deal with, it can be easy to forget that it is a problem that impacts millions of people every year. Whether you are a relatively new borrower at only 18 years old or have maintained a well-seasoned financial history for decades, there is a constant stream of debt potential. There are many types of debt out there and, depending on your age group, you may be more susceptible to certain kinds. Luckily, Liberty Debt Relief  has all the information you need to prevent falling for financial traps.

Common Types of Debt By Age Group Infographic

So many Americans live with different types of debt. Liberty Debt Relief is here to help you determine what types affect your age group* most.

  • 28% of debt for 18 to 24-year-olds is from student loans.
    • Credit card debt is the second highest debt for this group.
  • 1/4 of the debt for 25 to 34-year-olds comes from credit cards.
    • 16% of their debt is student loans, while 3% is mortgages.
  • 32% of the debt 35 to 49-year-olds owe is related to home mortgages.
    • This is followed by credit card debt and vehicle loans.

Source: CNBC

Ages 18-24: Student Loans

The cost of attending college only continues to grow. In fact, the cost of college from 1998 to 2019 has increased by more than $20,000, which is why it is no surprise that so many young adults are suffering with student loans. In many cases, students do not leave college without obtaining at least $25,000 in student loan debt, which can take decades to pay back between high interest rates and finding a job that pays enough to make all the loan payments.

While there are various types of consumer debt, this is one of the easiest to get trapped into. Young adults are constantly told to pursue college so they can get a good career, which is definitely a good choice, but for those who have no choice but to rely on student loans, it can also be a financially devastating move. Only six months after graduating, you will have to begin paying back your loans and, by that time, they have already accrued months or even years of interest.

To avoid falling further into debt during college, consider finding a part-time or summer job so you can limit the number of loans you have to take out initially. Of course, you can also seek a debt settlement if you hold private student loans and you are experiencing a serious financial hardship that is keeping you from paying on your accounts.

Ages 25-34: Credit Cards

One of the most common types of debt across the board is credit cards. While everyone seems to have one, 25- to 34-year-olds seem to have the biggest issue in paying back their credit card debt. The average debt in this category across the United States is nearly $6,000 and, when you consider the high interest rates, it is really no surprise that so many people end up in crippling credit card debt.

Another reason people of this age group so easily end up with this debt is because, almost as soon as you get one credit card, essentially every financial company starts sending credit card offers. People in this age group are still pretty new to debt management and many make the mistake of opening up multiple credit cards and spending thousands of dollars on their credit lines every month that they can’t afford.

The best method of defense for this group is to avoid opening up multiple lines of credit. Even if you feel like doing so would be affordable, there is really no way to guarantee that the same income you have this year will be the same you have the next and there is a good chance you will overspend. Secondly, make sure to create a budget that you are confident you can stick to. If you are ever unsure about your financial situation, it is also a good idea to reach out to friends or family who have experienced a similar situation or work with an accredited debt relief company. Finally, if you’re already in over your head, credit card debt settlement may be an option for you.

Age 35-49: Mortgages

Mortgages are a type of consumer debt that often goes forgotten but is very impactful. At this point in one’s life, they often want to go from apartment hopping from year to year to really settling down and purchasing a home and a mortgage is often the answer. For those who are truly suffering from debt, they may have to take out a second mortgage just to be able to afford their day-to-day life.

To avoid going into mortgage debt, the best thing you can do is avoid purchasing a home that you cannot eventually pay off for the most part. While renting an apartment or a home may not be your ideal life, it can save you thousands of dollars of debt in the long run. If you really have no choice but to take out a mortgage, there are also some things you can do to avoid additional costs. Make sure to find out if there are any prepayment penalties, and if not, make as many extra payments toward your principal balance as you can. It is also in your best interest not to extend your repayment plan and to make sure your loan is set at a fixed rate.

Age 50+: A Diverse Mix

While older individuals typically have the lowest amount of overall debts out of all the age groups, they do typically have the most diverse debt portfolio. Because they have had more time to develop a financial history, they typically have a larger mix of credit card, mortgage, loan, and many other types of debt. Another problem in this group is that many do not have a lot of savings available and, therefore, do not have a safety net for the debt as they get closer to retirement.

For this group, it is essential to have as much money saved as possible so expenses and debt won’t ruin your retirement. This could be in the form of a corporate or government-sponsored savings plan, such as a 401(k), or even a general savings plan that you have regularly contributed to over the years. However you choose to do it, make sure to have enough saved up that you can live off of if need be while also diminishing your remaining debts.

Know What to Expect

Knowing the types of debt that generally affect people within your age group, as well as others, allows you to take actions that prevent you from falling into financial traps. Liberty Debt Relief can help you learn what kinds of debts to avoid and limits that you can set to help you falling behind on monthly payments and running through your safety net too early. Contact us today to get started with your debt relief plan.

Debt Specialists | Negotiate Debt Successfully | Liberty Debt Relief

The millions who deal with debt every year tend to have the same general story — it started with only a couple purchases on a credit card or a single loan and, before they knew it, they owed hundreds of thousands of dollars to a list of businesses. One of the first things people usually say is, “I thought I could take care of debt settlement on my own.” Unfortunately, for many, this is simply not the case. Debt negotiations are a complicated and tolling process. By opting for help from a debt settlement company and its experienced debt specialists, you may actually better your chances of success.

Take a Load Off Your Shoulders

Working on getting out of debt is a great step, but it’s not one that comes easily. If you try to take on debt settlement alone, there’s a chance that your lenders will simply refuse to negotiate with you. If they do agree to work directly with you, it may prolong the process by years and can also put you in a situation where the mental, emotional, and even physical toll of it all reaches its boiling point.

Debt specialists will utilize all their professional debt settlement strategies to help make sure your negotiations go as quickly and smoothly as possible. Once you sign on to work with them, they will take on the burden for you. No longer will you have to stress about making phone calls, responding to notices, or even finding time to separate yourself from your bills long enough to spend time with loved ones. All you will have to do is provide them with the correct information so they can tailor the settlement terms to your needs and plan regular conversations about how the negotiations are going.

Find a Solution to Being Indebted to Multiple Creditors

Being someone who says, “I’m going to take care of this debt settlement on my own” is a bold move towards a tough journey. Even when you have just one outstanding debt or creditor you are dealing with, the months of work and endless back-and-forth conversations that may seem like they’re getting you nowhere can be overwhelming. If you are working to settle debts with multiple creditors, that time spent negotiating can double, triple, or more, and get significantly more complicated.

With a little help from debt specialists, however, you can decide which of your multiple accounts to settle and get through those endless negotiations. Because your specialist will likely have years upon years of experience, they will know exactly how to work with each company individually to get you the best possible terms for your situation. It will also likely take them substantially less time to reach the deal you want, and they’ll be able to explain every step of the process. That includes ensuring you understand what creditors expect after a debt settlement is complete and the agreement is signed.

Save Money You Didn’t Know You Could

When it comes to negotiating debt settlement with creditors, one of the most difficult tasks is finding the terms that will really help you save money. At this point, you have probably gone over your budget and know how much you can afford to pay towards settling your debts. If you call your lenders directly, they may say you can save a couple hundred dollars if you pay everything up front, but that probably would not be of much assistance to you.

By getting support from debt specialists, you can actually save more money than you would expect. These companies typically have contacts at the lending companies and will not only work out ways to get you a reasonable settlement, but they may also get fees and other costs waived for you. Those fees can often rack up to be hundreds, if not thousands of additional dollars.

Utilize Their Experience

If you were to try and negotiate a settlement on your own, you would have to go through the tiring process of trying to find someone to talk to first. You probably already know how it typically works. You call the 1-800 number listed on the company’s website, go through a robot directory, talk to an operator, get redirected, and end up getting told that there is really nothing that can be done, all while having to explain your situation multiple times to several different people.

One of the most helpful things about working with a debt specialist or debt relief company is that they have several years of seeing similar cases back to back, which allows them to gain reputations and relationships with the companies you are in debt to. When you request their assistance to settle, they will likely already know exactly who to call at that company to get the best deal for you. Then, they’ll take the time to explain your financial hardship and current budget, so you don’t have to.

You Don’t have to Negotiate Alone

No matter what, there is help available. Negotiating debt settlement is a long process and always works best when you go through it alongside a certified and trusted debt relief consultant who knows exactly how to get you out of debt in the quickest and easiest way possible. Contact Liberty Debt Relief today to find out how debt settlement can help you establish a brighter financial future.

Debt Delinquency: What If I Don’t Make An Effort to Pay My Debts?

Americans are carrying record-high amounts of credit card debt. Combine this with relatively stagnant wages and ever-increasing cost-of-living, and you have a recipe for chronic indebtedness. The average American family carries over $8000 in credit card debt and many are often on the brink of debt delinquency.

If you’re struggling with credit card debt and are looking for a debt relief option, you may have started to weigh the pros and cons of not paying off debt vs. settling. You may have even heard that, if you stop paying your debt, creditors may be more likely to offer you a settlement or forgive your debt. However, this topic is highly nuanced. Debt delinquency can mark the beginning of your descent into financial ruin. In answer to the question “What happens if I don’t pay my debts?”, we’ve put together a few important bits of information:

Your Credit Score Will Take a Major Hit

If you stop paying your debt, your financial institution will report all your missed payments and delinquent accounts to the credit rating agencies. These negative items on your credit score can have severe negative consequences on your life. They can prevent you from renting an apartment, obtaining a mortgage, or obtaining much-needed credit in times of emergency. You might even see increases in your insurance premiums.

Accruing Interest and Fees

Don’t be fooled: your debt will continue to accrue interest and fees, whether or not you are paying. In fact, at a certain point in your debt delinquency, penalty interest rates and fees may be applied to your account. These interest rates can be several times your usual interest rate and it can take several months to regain your original interest rate, even if you do bring your account up-to-date.

Calls From Your Financial Institution

If you are just a few days or weeks behind, you may start receiving a couple of calls per day from your credit card company reminding you to pay your bills. The frequency of these calls will increase the longer your account remains delinquent.

Debt Collection

After a certain period of delinquency, usually 90 days, your account will most likely be transitioned to your credit card company’s collections department. At this point, your credit card company considers your account a liability rather than an asset and will employ more aggressive tactics to contact you. The calls, emails, and letters will become much more frequent. Your credit card company may even sell your debt to a collections agency, which may be even more aggressive than the credit card company. Debt collections agencies often pursue any legal recourse available to recover the outstanding money.

Lasting Effects

Let’s say your fortune changes and you come up with the money to pay off your debt. The collections calls stop, the interest stops accruing, and you can finally breathe easy, right? Well, maybe not. Negative items can stay on your credit report for seven years. This means that potential creditors can see these items and they might continue to affect your finances for years to come.

Your Options

If you are currently struggling to pay off your debt, it might be time to contact Liberty Debt Relief and learn how we can help you get your life back on track. Our experts can help you through the tricky landscape of debt delinquency, and and the pros and con of paying off debt vs. settling. Contact us today!

Signs You may Need Help with Debt

There comes a point in just about every person’s life when they go to make a large purchase and realize that their credit cards simply will not work and their bank will not allow them to overdraft their account. This could happen for various reasons — maybe you recently lost a job and have not found a new one or maybe you are just not that experienced in managing finances. Whatever the reason for maxed out credit cards, it is certain you could use some professional debt relief advice.

Easily the best part about seeking this advice is that it does not require you be in hundreds of thousands of dollars of debt. There are quite a few warning signs that signal it is time for you to seek some extra guidance. If any of these situations sound like your own, reach out for a professional hand to help pull you out.

Minimum Payments are Your only Payments

While minimum payments are a great way to prevent late fees and debt collectors, they do not do much in the way of helping with your debt. Minimum payments are used by credit card companies to ensure you make some kind of gesture of financial good will every month, but, unless you pay off your total statement balance every month, you will only accrue more interest on your amount owed. In fact, 43 percent of Americans do not pay their credit card balance each month. Many times, the interest that is added is significantly higher than the minimum payment you made, essentially making a minimum payment useless if you owe several thousand dollars.

There is No More Credit Available

A maxed out credit card usually means two things: one, that you have drained through all of your available funds, and two, that you have likely failed to make any significant payments toward that balance. The first step in looking for how to get help with this kind of debt is to take a look at all of your accounts and what you do and do not have available to you. If you have several credit card or loan accounts, you need to find out how much money is owed on all of them and how much balance you have left. People with a large number of accounts typically have a larger debt owed, and in many cases, they do not even realize the dire financial situation they have put themselves in.

Your Credit Score is Plummeting

Credit scores are basically the holy grail of financial worth. These scores are essential in determining your interest rates, the kinds of accounts and loans you are eligible for in the future, and can even determine if you will be able to get approved for a large purchase, such as a vehicle or home. People who have high credit card debt or other forms of debt likely have low credit scores that fall under 650, which will make any lending experience now or in the future that much more difficult. The only way to help with this debt and improve your score is to pay off the debt and figure out a strategy to make sure you do not get back into financial distress.

Savings are Non-Existent

When debt gets high, savings get low. Millions of people pay off what they can, when they can, with what they happen to have available. Since savings accounts are usually seen as non-essential for so many people, they are usually one of the first corners people cut when they attempt to get out of debt on their own. Truthfully, unless you happen to have millions of dollars in savings that would not even feel a dent of a few thousand, using savings as your solution for figuring out how to get help with debt is not the best way to go.

Medical Visits and Emergency Funds are Never a Consideration

Similar to savings accounts, people who are in significant debt usually take all possibility of emergency funds off the table. They will usually give up important doctor appointments and wellness checks, avoid emergency rooms and ambulances at all costs, and will not set aside money in case an incident does occur. While allocating extra money to your outstanding financial accounts does help with debt in the short term, you also put yourself in the likely situation that you and your family are only one broken bone, sprained ankle, flu, or other incident away from going into worse debt than you started off with.

Budgets are Uncharted Territory

Budgeting has a reputation for being complicated to figure out and even more difficult to stick to. While it certainly takes time to figure out a budget, it is not impossible. One of the primary reasons so many people end up in such significant debt is because they do not know how to create a budget that works with their lifestyle rather than against it. Many seem to believe that they have to take a hardcore financial diet when using a budget that limits the things they love and what they find essential in their quality of life. In reality, that is not the case. A budget is actually a great tool to help you understand how to prioritize all of the things you love and to find a way to allocate funds as best as you can in the long term and short term. If you are not one of the ⅓ of Americans who have a household budget, you could seek the help of a financial expert.

Your Health is Suffering

One of the most significant indicators that you are in over your head with debt is your mental, physical, and emotional health. Money is one of the leading reasons for stress in the U.S. and has been linked with thousands of people developing depression, anxiety, ulcers, daily headaches, and much more. Understanding how your financial success determines your personal health is essential, and, if you do not have a grasp on it, it may be a good time to get help with debt.

Take Charge of Your Debt for a Step Toward Your Future

Debt has become almost a rite of passage for millions of people in the U.S., but it does not have to be. If you are worried that you have dug yourself into a poor financial situation, or you simply want to address the issue before it begins, Liberty Debt Relief can provide the debt relief assistance you need to succeed. Contact us today and we will get started on helping you take a giant leap forward right away.

How Debt Settlement Can Benefit Your Credit

Your Debt Settlement and Credit Score

If you’re late on one to three payments or have used 80% of your available credit across your accounts and you’re searching for ways to alleviate debt, you may be considering taking advantage of a debt relief settlement. This will allow you and your debt relief company to negotiate with your lender for a lower amount. Settlement can be the best option available for many people, but, before deciding to go with this route, it is important to understand the relationship between debt settlement and your credit score.

So, just how does debt settlement affect your credit? Debt and credit go hand in hand, so when you open any kind of account that puts you in debt, it will directly reflect on your credit report, which is a way for future lenders to see how well you manage your lines of credit. It’s easy for people to find themselves in a situation where they have accrued a lot of debt, and when that happens, your credit score can take a significant hit. Luckily, a great option available for many people is debt settlement. Along with potentially minimizing the negative toll on your credit report, you can eliminate your financial risks quicker and easier and work on improving your credit score.

Lower the Amount Owed

One of the biggest factors in your credit score is the amount you owe, and Liberty Debt Relief may be able to settle for as low as 45 cents on the dollar! In fact, your debt amount is about 30 percent of your total credit score. If, for example, you are $10,000 in credit card debt and have mostly or completely maxed out all of your credit cards, then this part of your credit score is likely suffering greatly. Part of this 30 percent is determined by your debt to credit ratio, so when more than 80 percent of the funds available on your credit accounts are used and you can’t afford to pay it off immediately, settling the debt may be the best option.

These programs can take between 24 to 48 months, but debt settlement may improve your financial management skills and credit score after you have paid on the negotiated amount for at least six months. More importantly, the better you utilize your credit card accounts, the sooner you can build a strong and secure credit report.

Begin Making Payments on Time

Accounting for 35 percent of your credit score is your ability to make payments in full and on time. Unfortunately, making the minimum payments every few months simply will not help get you completely out of debt. It is important to understand that how often you make payments and in what amounts does impact your debt settlement terms and affect your credit. The good news is that, even if making payments was not always possible in the past, debt settlement services can make them more manageable.

Your debt relief expert will look at your income and expenses and help you create a budget that makes sense for your situation. From that information, together you will determine an amount you can afford to pay within the next few years and then negotiate that amount with your lender. In the end, you will have a significantly lower debt that you can afford to make payments toward every month. Not only will your credit score improve, but it will also make you more motivated to work toward long-term financial stability.

Avoid Bankruptcy and a Negative Financial Future

One of the biggest mistakes people make when they are trying to get out of debt is immediately filing for bankruptcy. While it is sometimes necessary, this method of debt settlement can severely impact your borrowing potential and credit score for at least a decade. Along with lowering your credit score several hundred points, bankruptcy is also listed on all financial paperwork, including for potential jobs, apartments, homes and future credit lines.

Another risk with bankruptcy is losing valuable collateral. Nobody wants to lose their car, home, business, or savings when they already feel as though they are at a financial rock bottom. Debt settlement can help you avoid that scenario by offering a solution that allows you to repay your debts in a way that works for you, not against you. The negotiated plan will allow you to make affordable payments and keep the items you value most. Moreover, when employers or apartment managers see debt settlement on your record, it will just be further proof that you do your best to make your payments and are willing to work with people to come up with a compromise.

A Solution that Suits Your Needs

If you are struggling to make monthly payments and feel backed into a financial corner, consider learning more about debt settlement services, like those at Liberty Debt Relief. This form of debt relief is designed with you in mind, and we want to make your negotiations as successful as possible. Get in touch with our experienced debt relief experts today to get a personalized debt relief solution.

What is Unsecured Debt?

Debt is an undeniable part of adulthood. No matter how much money you make and what career path you are in, nobody can hide from it forever. It can come into your life through student loans, creep up with one too many credit cards, or you could just be down on your luck as a whole financially, but the good thing about debt is that it does not have to last forever. Getting out of debt requires that you know and understand the various types of credit options, such as personal loans, business loans, and credit cards, and how they can be defined as one of two types of debt: secured and unsecured debt. If you have discovered that your current credit accounts are defined as the latter, Liberty Debt Relief can help you answer the questions regarding unsecured debt so you can start moving forward financially.

Understanding the Unsecured Basics

So, what is unsecured debt? Simply enough, it is a type of debt that did not require any kind of collateral to obtain in the first place. Collateral can be your car, boat, home, 401(k), stocks, cash, or even your business. If you fail to pay back the debt as agreed, the credit company can seize or freeze your assets through a court order. When that happens, you can either pay back the credit lender in full or work out some kind of deal with the company, but if you fail to respond or inquire about your accounts being frozen or titles being transferred, they will likely liquidate your assets and use that to pay off your debt. Choosing to go with credit accounts that include unsecured debt, such as credit cards, private student loans, utility bills, and medical bills, ensures that this kind of situation never occurs.

While you don’t have to worry about losing your belongings if your payments fall behind for unsecured accounts, getting such a deal does not come without a price. Most credit options that fall within this category have significantly higher interest rates than those that qualify as secured debts. High interest rates mean more money spent over time and it can double or triple your initial loan amount if you are not careful. This is the lenders’ way of ensuring people make their payments in full (and as soon as possible) and keep people as serious about unsecured debts as they would be about losing their high-value items held as collateral for secured debts. If you still fail to pay back your debt, the lender can sue you and a court ruling can garnish your wages and cause you to sell property to pay back the debt.

Using It to Your Advantage

High interest rates and the possibility of having your future wages taken away until you pay off a debt can definitely be intimidating, but unsecured debts are some of the easiest to manage. If you find that the monthly payments are too high, call your lender and see what they can do to help you. At the end of the day, they want to do what they can to make sure they receive their money. What is even better about unsecured debt is that if you have multiple accounts, you can easily budget and prioritize your debts based on the interest rates and other terms and conditions.

The key to financial success is not letting debt intimidate you, and understanding the ins and out of debt is a great first step. Talk to Liberty Debt Relief today to find out how a little budgeting and prioritizing can help you clear your unsecured debts.