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Consumer Debt Surges

Total consumer debt in the United States witnessed a substantial surge, rising by seven percent from 2021 to 2022. The figure escalated from $15.31 trillion to $16.38 trillion during this period. Notably, auto loans, credit cards, mortgages, and personal loans saw the most significant increases on a percentage basis. Personal loans surged by 18 percent, while credit card balances grew by 16 percent. Consumer demand for auto loans was notably high, leading to cars selling for prices exceeding their manufacturer's sticker prices, resulting in an average car sale price increase of 9.4 percent from September 2021 to 2022.

Rising Credit Card Debt Raises Concerns

Consumers in the U.S. accumulated credit card debt at unprecedented levels in 2022, with an astonishing $179.4 billion in new credit card debt incurred during the year. This includes an $84.9 billion surge during the fourth quarter alone. However, 2023 commenced with consumers making minimal progress in paying down their credit card debt, with just $24 billion paid off, marking the second-smallest first-quarter credit card paydown in the past decade.

Debt Balances Increase Nationwide

In 2022, all 50 states and Washington, D.C. witnessed increases in average debt balances. Idaho (9.3 percent) and Utah (7.8 percent) experienced the most substantial debt increases from 2021 to 2022, while Oklahoma (0.5 percent) and Connecticut (0.9 percent) reported the smallest rises. Illinois saw a modest increase of 1.6 percent in average consumer debt, from $85,991 to $87,351. Consumers with 'Good' or better FICO scores, constituting over 35 percent of all U.S. consumers, saw an average debt increase of 3.9 percent, reaching $95,067.

Drivers of Increased Debt Levels

The surge in consumer debt can be attributed to three primary factors: inflation, interest rates, and consumer demand. Inflation escalated by eight percent from September 2021 to 2022, while the Federal Reserve raised interest rates from 0.25 percent to 4 percent. The global economy largely rebounded in 2022 after pandemic-induced slowdowns in 2020 and 2021. Early indicators suggest a slowdown in inflation and reduced consumer spending in 2023, potentially mitigating the growth of debt levels this year.

Illinois Debt Landscape

Illinois residents fare relatively better in terms of debt accumulation, with an average debt balance of $50,450 for individuals with credit reports, compared to the national average of $55,810. In 2021, Illinois ranked 16th in the nation for per-capita bankruptcy filings. Notable debt statistics for Illinois include an average mortgage debt of $34,500, average credit card debt of $3,080, average student loan debt of $6,120, an overall debt payment delinquency rate of 1.99 percent, and 20,343 Illinois residents filing for bankruptcy in 2021.

Debt Relief Options in Illinois

Illinois residents seeking assistance with their debt have several avenues, including banks, credit unions, online lenders, and debt relief companies. The five major debt relief options available are debt management programs, debt consolidation loans, non-profit debt settlement, traditional for-profit settlement, and bankruptcy.


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