Latest news with #HouseholdDebtandCreditReport
CNBC
6 days ago
- Business
- CNBC
NY Fed: Total household debt increases by 1% in Q2 to $18.4 trillion
CNBC's Steve Liesman reports on the Federal Reserve Bank of New York's Household Debt and Credit Report for the second quarter of 2025. Delinquencies on auto loans and credit card debt remains elevated while student loan delinquencies surge.
Miami Herald
19-06-2025
- Business
- Miami Herald
Shark Tank's Kevin O'Leary sounds alarm on 401(k) growing problem
Many American workers understand that employer-sponsored 401(k)s are a practical and efficient way to build retirement savings, especially when employers offer matching contributions. With automatic payroll deductions, they allow workers to invest in their future without much effort. Kevin O'Leary, an entrepreneur and investor on ABC's "Shark Tank," emphasizes the importance of 401(k) plans and the financial discipline required to benefit from them. Don't miss the move: Subscribe to TheStreet's free daily newsletter However, O'Leary also issues a stark warning: Many Americans struggle to contribute meaningfully to their 401(k)s because they spend more than they earn. He describes the financial anxiety that accompanies the reality of people living paycheck to paycheck, burdened by debt, and clinging to unrealistic hopes of sudden wealth. In his words, they're "steeped in magical thinking about money," believing a lottery win or inheritance will solve everything. To break this cycle, O'Leary recommends a clear-eyed assessment of one's finances. He suggests calculating a "90-Day Number" - total income over three months minus total expenses. Related: Dave Ramsey sends strong message to Americans on Medicare If the result is positive, it is time to increase 401(k) contributions. If it is negative, that is a wake-up call to cut spending and budget smarter. Ultimately, O'Leary believes that 401(k) plans are essential, but only effective if individuals take control of their financial habits. He urges Americans to start making deliberate choices that prioritize long-term security over short-term gratification. In order to contribute a sufficient amount of one's income to 401(k) plans, it is of vital importance for Americans to stay away from credit card debt because interest payments hinder the ability to save and invest. According to the 2025 first-quarter Household Debt and Credit Report from the Federal Reserve Bank of New York, total U.S. household debt rose to $18.2 trillion. Credit card balances alone reached $1.18 trillion, representing an increase of more than 6% compared to the same period the previous year. O'Leary minces no words in his warning. "Spending too much is a disease. And credit card debt is a cancer," O'Leary wrote in his book "Cold Hard Truth on Men, Women and Money." "The first time you get a credit card bill and don't pay off the full balance, it's as if you've allowed the first financial cancer cell into your life," he added. "The compounding nature of those frightening interest rates is a monstrous thing to behold." More on retirement: Dave Ramsey offers urgent thoughts about MedicareJean Chatzky shares major statement on Social SecurityTony Robbins has blunt words on IRAs, 401(k)s O'Leary argues that credit card companies often justify their high interest rates as a safeguard against fraud or defaults, but in reality, these rates are a core part of their profit model. He believes the real earnings come from the large segment of consumers who carry a balance month to month and struggle to pay it off entirely. To O'Leary, this business strategy is incredibly lucrative - companies earning an average 16 percent return are sitting on a financial gold mine. He underscores that if an individual investor saw returns like that consistently, they would go to great lengths to defend it. In his view, credit card companies do exactly that - protecting and nurturing this high-yield system by keeping credit easy to obtain and encouraging spending behaviors that trap consumers in cycles of debt. It's not accidental. And that's the danger he wants people to wake up to. Related: Jean Chatzky sends strong message to Americans on Social Security Social Security monthly paychecks are not enough to live comfortably on in retirement, so investing in 401(k) plans is a major strategy to live a satisfying life after one's working days are over. O'Leary believes that the profit incentive for credit card companies does great harm. That significantly applies to people striving to boost their 401(k) plan values. Credit is widely available by design, O'Leary explains, pulling in overspenders into deep debt cycles where compounding interest outpaces any realistic financial return, trapping them indefinitely. He makes an analogy to bring the point home. "The real tragedy, if not the real crime, of personal overspending is that any bartender is legally bound to cut off a dangerously drunk person. But you won't see that happening in a store," O'Leary wrote. "No cashiers at Neiman Marcus or Saks are going to place their hand over your credit card and suggest you don't really need three pairs of skinny jeans, that one pair will suffice," he added. "Nope. They'll congratulate you on your 'finds' and reinforce the fact that you 'deserve to splurge.'" Related: Tony Robbins sends strong message to Americans on 401(k)s, IRAs The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
CBS News
14-05-2025
- Business
- CBS News
What can you not do after filing Chapter 7 bankruptcy?
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Filing for Chapter 7 bankruptcy can help wipe your financial slate clean, but there are restrictions to consider, too. Getty Images Americans are in a tough spot right now when it comes to debt. According to the latest Household Debt and Credit Report, the total household debt hit $18.2 trillion in Q1 2025, and credit card balances, while slightly down from the previous quarter, remain alarmingly high at $1.18 trillion. Student loan delinquencies are also creeping back up, with 8% of borrowers now behind on payments — the highest rate since 2019. These types of financial issues are indicative of how difficult it has become to manage debt at a time when interest rates are still elevated and other economic pressure continues to mount. In this environment, Chapter 7 bankruptcy has become an increasingly considered option, as evidenced by the recent uptick in personal loan bankruptcy inquiries. This type of bankruptcy is often referred to as liquidation bankruptcy because it allows filers to discharge most unsecured debts in exchange for surrendering certain non-essential assets. So, for those who are overwhelmed by credit card debt, medical bills or personal loans, filing for Chapter 7 bankruptcy can offer a much-needed financial reset. But this type of bankruptcy isn't a get-out-of-debt-free card, either. Filing comes with strict limitations, both during and after the process. If you're thinking about using this option, it's essential to understand what you can't do after filing — and why exploring your other alternatives might be worth considering first. Learn about the debt relief strategies you can use to avoid bankruptcy. What can you not do after filing Chapter 7 bankruptcy? If you're thinking about pursuing Chapter 7 bankruptcy, here's what you can't typically do after you file: You can't discharge every type of debt Chapter 7 wipes out many unsecured debts, but not all. Obligations like child support, alimony, recent income taxes and most student loans are non-dischargeable. Even if you're granted a full discharge, you'll still be responsible for those types of debts, and creditors can continue collecting them. Speak to a debt relief expert about your options today. You can't keep all your assets While each state offers a list of "exempt" property you can protect, like modest home equity and personal items, anything deemed non-exempt may be seized and sold by the bankruptcy trustee. That could include second cars, valuable collections or investment properties. If you have significant equity in certain assets, Chapter 7 could cost you more than you bargained for. You can't protect co-signers from collections If someone co-signed a loan for you, like a car note or personal loan, your bankruptcy discharge won't protect them. Once you file, your creditors may shift their focus to your co-signer, demanding full payment and possibly pursuing legal action. That can add unexpected complications. You can't file again for a long time After you receive a Chapter 7 discharge, you must wait eight years before filing another Chapter 7 case with the bankruptcy court. That waiting period applies even if you run into financial trouble again within that window, which makes it crucial to treat Chapter 7 as a one-time solution, not a recurring fix. You can't instantly rebuild your credit Chapter 7 stays on your credit report for 10 years. While some lenders may be willing to extend credit within a year or two of discharge, it's often with sky-high interest rates, and your creditworthiness will still take a hit either way. That means renting an apartment, financing a car or getting a mortgage can become much more difficult. Rebuilding credit the right way takes time, effort and strategic planning. You can't pick and choose who gets paid Once you file for Chapter 7, a court-appointed trustee takes over your finances. If you hoped to repay a loan to a friend or family member before your case is finalized, you're out of luck. The trustee can undo those payments if they were made too close to your filing date. The bankruptcy code treats all creditors equally, and preferential payments can be clawed back. What Chapter 7 alternatives are worth considering? Chapter 7 can provide relief, but only if it's truly your right option. Depending on your situation, there may be less drastic ways to manage your debt: The bottom line Chapter 7 bankruptcy can offer a financial reset, but it's not without consequences. You'll likely lose some assets, damage your credit and remain on the hook for certain debts. You also won't be able to file again for years, which can leave you vulnerable if new financial challenges arise. That's why it's so important to understand what you can't do after filing and weigh those limitations against the possible benefits. And, you should also consider your other debt relief options to ensure that you're not overlooking a strategy that would have less severe repercussions for your credit and your finances.
Yahoo
10-05-2025
- Business
- Yahoo
This WSJ writer grew up believing money talk was ‘vulgar' — here's what you can learn from her money mistakes
Not everyone's a natural with numbers — but if there's one life skill worth forcing yourself to get good at, it's money. Katie Roiphe, author of The Wall Street Journal's Personal Space column, has never been afraid to tackle bold subjects head-on in her writing, according to a recent interview with the University of Austin. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) But, as she wrote in a recent piece for The Journal, she hasn't always been able to say the same about her approach to money. Roiphe peeled back the curtain on her own financial blind spots, admitting that while she's generally 'highly functional,' the world of personal finance has always sent her running for the hills. 'I would basically summarize my approach to all practical money matters as some combination of hope and avoidance,' she wrote. For Roiphe, that deep-rooted avoidance traces back to childhood. Growing up in a household where her mother — an unapologetic intellectual — deemed money talk 'vulgar,' Roiphe absorbed the idea that caring about cash was crass. But the problem was no one taught her one crucial life hack: if you want to stop thinking about money, you need to have enough of it first. Roiphe's not the only one who's tempted to ghost her finances. For most of us, when something feels stressful, it's way easier to shove it to the back burner and hope it magically sorts itself out. 'I would just leave the mail in a pile, as if not actually laying eyes on a bill would make it vanish. I have an active imagination, and I could almost wishfully think away a heating bill,' she wrote. But pretending your bills don't exist doesn't make them disappear — it just racks up your debt. In fact, U.S. household debt ballooned by $93 billion last quarter alone, hitting $18.04 trillion, according to the Federal Reserve Bank of New York's latest Household Debt and Credit Report. Turns out, ignoring the problem just makes it worse. For Roiphe, the financial wake-up call got even harsher during her divorce. She realized she had no savings, no benefits outside her ex-husband's job and no financial safety net of her own. It was a harsh lesson in what can happen when you lean too hard on old-school gender norms, or the idea that 'there are certain aspects of life that men should take care of,' she wrote. But that kind of thinking can leave you exposed when life inevitably flips the script. One smart move is to start having open, no-shame conversations with your partner about money. Whether it's a monthly check-in when the bills roll in or bigger-picture chats about long-term goals, getting on the same page is key. And if your partner is more finance-savvy, don't be afraid to learn from them. Talk through tricky concepts, and grow together so you're never left in the dark when it matters most. Read more: BlackRock CEO Larry Fink has an important message for the next wave of American retirees — here's how he says you can best weather the US retirement crisis Eventually, Roiphe began building real financial security for herself. She landed a steady job in higher education, and that monthly paycheck helped her support her daughter and son while navigating life in an expensive city — but stability didn't mean fairness. She soon found out her male colleagues at the university were earning significantly more than she was. And, it wasn't because they were more qualified. The real difference was 'they asked for more money,' Roiphe wrote. It sounds simple, but it's a step many people skip — often out of fear, uncertainty or discomfort. And while confidence plays a big part, broader pay gaps still persist. According to the U.S. Bureau of Labor Statistics, women who worked full-time in 2023 earned 83.6% of what men earned in the same professions, highlighting a pay gap that negotiation alone can't always close. If you're ready to boost your confidence and your paycheck, preparation is key. Start by making a solid case for yourself: gather salary data, list your accomplishments and be clear on exactly what you're asking for. Then practice saying it out loud — whether to a friend, your mirror or even your dog — so it feels second nature when the time comes. Finally, don't wait for your annual review to make your value known. Set up regular check-ins with your manager to keep the conversation going and make sure your contributions stay top of mind. At the end of the day, financial confidence isn't something you're born with — it's built, one bold step at a time. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
