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Don't Know How Much You Owe? You're Not Alone


Confused about debt

Are you too worried about debt to think about how much you owe

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Over all the years we've been helping North Carolina consumers deal with their debt, one of the things we've seen is that many people just don't know how much they owe. When people turn to us for bankruptcy solutions, what they do know is that they can't pay their bills. They may be living paycheck to paycheck, may be dealing with creditors harassing them constantly or may be facing foreclosure of their home or repossession of their car.

How Much Do You Really Owe?

The average American household owes more than $203,000 when you factor in mortgage, car loan, student loans, credit cards and medical bills. And that's just the amount of the debt at any given point in time. When you factor in interest and fees, you'll pay back far more than that. And, if you have no clue how much you owe and to whom, that's a red flag that your finances are likely in bad shape. The main reason that most people don't know the big picture of their debt is that they're too caught up in the day to day, paycheck to paycheck survival mode.

How Much Does Your Spouse or Partner Owe?

The National Endowment for Financial Education estimates that 33% of people have lied to their partner about money, and 35% were lied to about finances. 76% of those said the dishonesty about money took a toll on their relationship. So even if you know how much you owe, you may not realize how much total debt there is in your household. Spouse and partners may keep credit cards that they hide from their loved one. They may have loans they haven't told them about or even unpaid back taxes. Because of this, your money situation may be even more complicated (and worse) than you know.

What Does This Lack of Knowledge Cost You?

It's imperative that you have a plan to deal with your debt, but how can you do this if you don't know what you owe. Ideally, aside from your mortgage and student loans, you should be able to pay off your debts within five years. Your credit cards, medical bills, furniture loans and other debts should all be manageable on your salary and able to be paid off within half a decade for you to be financially stable. If not, you may be overburdened with debt. What's worse is that you may not even know you're in over your head because you haven't stopped to look at the big picture.

Why Some People Don't Want to Know What They Owe

Many people who are struggling financially don't even open their bills because they know it's bad news. Or, they selectively open only those they must deal with like utilities. Other bills, like past due medical or credit card bills they may shove in a desk or throw them directly into the trash unopened. This is the financial equivalent of putting your head in the sand. But ignoring your bills, collection letters and creditor statements won't make them go away. Your debt won't magically evaporate by ignoring it. But this behavior is far from unusual. When people come into our offices for a bankruptcy consultation, they often bring in handfuls of mail that's not opened. You don't have to live this way.

If you're ready to deal with your past due debt and get the financial fresh start you deserve, call us at +1-919-646-2654. The North Carolina bankruptcy experts at the law offices of John T Orcutt can help. Contact us now for a free consultation at one of our convenient locations – we're in Greensboro, Raleigh, Durham, Garner, Wilson and Fayetteville.

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