After graduating college and sometimes pursuing an advanced degree, Arizona residents in their 30s may think they have the whole world at their fingertips. A well-paying job and a house in a nice neighborhood may no longer seem like something in the distance. However, with the collapse of the housing market and the economy, more and more people find themselves straddled with staggering debt in their 30s, most of which can be attributed to college loans.
According to the Census Bureau, the largest amount of household debt is held by people between the ages of 35 and 44. Their average debt surpasses the next indebted group by 25 percent.
Debt is inevitable at this stage of life as buying houses and starting families are at the top of priority lists, but, if not managed correctly, debt may lead to financial trouble in the future. When debt becomes overwhelming, it is possible to file for personal bankruptcy protection, whether it is Chapter 7 or 13, and restart financial lives anew.
The good news is that if debtors are able to manage their debt in their 30s, they may be better off in the long run. Debt management does not mean avoiding debt, but paying off important debts first, while simultaneously funneling away money for retirement funds and children's college funds. This ensures monetary problems do not hit in the future.
As tempting as it is to keep charging everything on credit cards, the one debt Arizona residents should strive to eliminate from their life is credit card debt. With high interest rates and fees, credit card debt ends up being more expensive than other types of debt. It is also one of the main reasons people end up filing for bankruptcy. Paying it off as soon as possible also improves credit scores, another important part of managing debt.
Nonetheless, despite the best of intentions and plans, it is still possible to incur large amounts of debt that seem overwhelming. Luckily, the federal and state protection of bankruptcy is available to those who want to restart their financial lives with minimal bills and taxes.
Source: Daily Finance, "4 Tips to help 30-somethings manage their debt," Dan Caplinger, Aug. 13, 2013.