The Federal Reserve Bank of New York released its quarterly report indicating there was a 13.9 percent increase in the number of debt collection accounts in the fourth quarter of 2013. The average balance of accounts currently in collections rose to $1,520 from $1,458, the highest level in a decade. Both the average balance and percent of consumers in collection have grown steadily over the last ten years, highlighting the growth of an ongoing problem in American finance.
Driving Down Debt
For many consumers, the entry into debt collections isn’t by choice. When financial hardship strikes it can be difficult to make ends meet, let alone satisfy obligations to creditors. Financial experts agree that the debt burden carried by most Americans is becoming a real problem and one that is likely to threaten the health of their family’s finance for many years to come. Here are a few ways to avoid debt collections and other problems with debt:
1. Pay on time — missing even a single payment can put your account into the hands of a debt collector. Keep track of your payment due dates or set up automatic payments to ensure your payment isn’t late.
2. Pay more — while paying the minimum balance is fine for keeping your account out of collections, it isn’t likely to pay off the balance any time soon. If you can afford to pay more, do it. Or at the very least save the money as a safety net. You never know when you will need to cover a payment your income can’t provide for.
3. Ask for help — if you find yourself unable to pay your monthly payment contact your creditor right away. Many are willing to work with you or offer flexible payment terms if you ask for help before you miss a payment. If you foresee long term problems with your debt payment, contact a Dayton bankruptcy lawyer to review your options for debt relief.