The Financial Meltdown: How Some Families Are Coping With Debt

The existing bailouts claim to open credit lines to the consumer. Neither government restructuring of debt programs are available; nor is any real monetary assistance being provided for the consumer.

Companies are freezing hiring and recruiting initiatives. Americans continue to lose their jobs at an alarming rate -- the unemployment rate has surpassed a 14-year high at 7.2 percent. While the U-6 unemployment rate may be as high as 13.5%.

Consumers are turning to debt relief programs for help. Debt relief companies can negotiate with creditors on the consumers' behalf to settle their debt for less than what they owe.

2.3 million American homeowners went into foreclosure in 2008, an 81 percent increase from 2007.

To avoid foreclosure, thousands of families, especially those who are unable to refinance, are entering loan modification programs offered by private companies or by the federal government.

Comments

[americaforme]

There aren't going to be enough food banks to handle the problem. The average American is really hurting, and it's not easy to face this new cruel poverty. There isn't anything to describe this incomprehensible demoralization, of begging for basics.

[KillTheMessenger]

I am shaking in my boots. Germany has had structural unemployment of 15% and more for decades. They live. So can we.

[anandakos]

"All-time high of 7.2%"????? What are you talking about? Standard unemployment reached 10.8% in the last two months of 1982 and exceeded the current level until mid-1985. It again exceeded 7.2% for 14 months from December of 2001 through January of 2003. And of course don't forget that in the darkest days of the Great Depression, it reached 25% for months.

This is not to underestimate the dire straits the nation faces; people are MUCH more indebted this time than in the last big recession in the early '80's. There will be many more bankruptcies, millions more foreclosures, and tens of thousands of businesses will fail because of the extreme debt load everyone is carrying.

But don't be the boy who cried wolf.

[tompoe]

Yes, and day five has passed without Obama declaring moratorium on foreclosures. Looks like America has been truly snookered again?

[levelshot]

Don't blame O for your problems.

[biwee]

You nailed it! There have been hard times in the USA before now. But, this time, people in America seem to have developed a sense of "entitlement". You know, that they are ENTITLED to that $2000 big screen TV.......and that $30,000 new vehicle they could not afford. So, presto, when this economic crunch came, many had NO MONEY, and HIGH DEBT. A big problem here is that people losing jobs have NO SAVINGS...no backup, no rainy day fund. But, they do have that big screen TV!!

[LRM216]

Perhaps some folks feel "entitled," but certainly not all of us. I relate to this post, and I am legion. I am 62, widowed, raising my 13 year old grand-daughter and work full time at a large domestic law firm (past 17 years). I am not behind on my mortgage or any other bill that I have, but am stretched to the limit. Have watched my 401K become $32,000 poorer for no reason of my own. I will, providing my health remains good, work until I am 70 so that I can max out my social security benefits in order to survive. I will be losing my homestead exemption which will raise my property taxes anywhere from $200 to $500 per year due to state cutbacks, and all monthly bills have almost doubled. While I pay my charge cards every month double the minimum, my rates "due to hard economic times" have risen to preposterous amounts. So far no one has offered any suggestions as to how I, and millions of others barely hanging on, are to survive. If my firm should fold and die as many other businesses have and continue to do so, I am merely a paycheck away from disaster. Many of us out here are working hard, pay all bills on time, and are finding it harder harder everyday. No one is rushing up to our door to make sure we stay whole. Entitlement? My arse, sir.

[Neal Rodriguez - Huffpost Blogger]

you're right it's just a 14-yr high;