Survey: American Debt Statistics
50.8% plan to be debt-free within five years
Accumulating debt is almost as unavoidable as death and taxes these days. Buying a home requires taking out a mortgage. Student loans come with getting an education. Still, many Americans see an end in sight to their personal debt.
A recent national survey by CreditDonkey.com found that 65% of respondents feel confident they can eliminate all existing personal debt within their lifetime. In fact, 42% believe they can get out of debt in less than five years; 8.8% within one year.
The rest are less optimistic: 28.3% think they can eliminate debt within 10 years, and 11% see themselves taking up to 20 years to reach that goal. Only 9.8% believe it will take them longer than two decades.
|How long do you think it will take you to get out of debt? © CreditDonkey|
The optimists in the group have formulated a plan for reducing their debt pile. Solutions vary. Those in debt can obtain a better interest rate up front for a bank loan. They can consolidate student loans into one monthly payment. Or they can work out a scheduled payment plan on auto repairs, medical bills, and other major expenses (31% of the survey respondents plan to go this route).
The survey also found that just over three-fourths of consumers will use a monthly budget to make it easier to repay debts, and 52% will consider working an additional job and create a new source of income to ease their personal debt. Only 12.6% indicated they will use bankruptcy as a primary option for eliminating outstanding debt.
|What method(s) will you most likely use to get out of debt? © CreditDonkey|
Of course, progress can’t be made when they are still accumulating debt at high clips. Half of the respondents feel confident they can avoid adding to their total debt, while 30% don't think they can pull off such a feat while resolving older debt. It’s little wonder why: Many milestones in life, such as owning a home or a car, require more money than the average person has on hand.
As a result, debt is a reality for most people. Just over 70% of the people surveyed affirmed they already possess some debt at the moment, and 68% said their amount of debt is normal for their age group.
Of course, despite the best of intentions and planning for paying down debt, some things – like unemployment or medical problems – cannot be accounted for ahead of time and can undermine a consumer’s efforts to resolve debt. Indeed, 58.6% of survey respondents worry about earning enough money to pay off their debt. Of that group, 50.3% fear they will need to file for bankruptcy if they can't resolve their debts, while 32.5% believe they will need to turn to a family member or friend for financial support.
CreditDonkey.com conducted this nationwide survey between September 17 and September 25, 2012. Of the 1,105 surveyed, the majority were age 18 to 44.