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Young Americans losing mortgage debt but gaining student loans

America has always been a debt-laden country. This includes debts owed by the government and debts owed by American citizens. The simple truth is that all of us live on borrowed money to at least some extent.

Therefore, when examining the financial health of the country, analysts are not primarily concerned with whether or not Americans have debt. Rather, they are interested in what kinds of debt are most prominent. A recent study shows that debt loads have changed significantly since the Great Recession, particularly among young adults.

For adults in their 20s, mortgage debts have gone down while student loan debts have risen. In 2005, mortgages accounted for 63.2 percent of the total debt load of Americans between 20 and 29 years old. Today, that number has shrunk to 42.9 percent.

Meanwhile, the share of debt related to student loans has nearly tripled during the same period. In 2005, student loans accounted for 12.9 percent of the total debt load among 20-somethings. Currently, student loans make up 36.8 percent of the total debt load.

Credit card debt for this age group has decreased slightly over time, but has remained relatively low. Debts related to auto loans have gone up slightly, but have also remained relatively low.

If you are struggling with significant debt, you may take some comfort from the idea that you are not alone. But the kind of debt you have makes a difference if you are considering filing for bankruptcy. In most cases, student loan debt cannot be discharged in bankruptcy, for instance.

Before you make any decisions about your financial future – especially decisions related to bankruptcy – it is important to carefully assess your financial situation and to understand all of your options. As such, you may want to make an appointment with an experienced bankruptcy attorney who can carefully examine your case and help you make an informed decision about next steps.

Source: The Washington Post, “How debt loads are changing for young and old consumers,” Jonnelle Marte, Oct. 8, 2014

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