3 Crazy Credit Card Debt Stories

Chloe Meltzer | December 02, 2022

Chloe-Meltzer
Legal Expert
Chloe Meltzer, MA

Chloe Meltzer is an experienced content writer specializing in legal content creation. She holds a degree in English Literature from Arizona State University, complemented by a Master’s in Marketing from California Polytechnic State University-San Luis Obispo.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Worried about your high credit card balances? Here are 3 crazy credit card debt stories and what you can learn from them.

Debt is something that many Americans deal with. Consumer debt is at $14.96 trillion overall, with the average American debt being $92,727. Most of this debt consists of credit card balances, student loans, mortgages, and more. The total auto loan debt in the United States is $1.42 trillion, at an average of $31,142 per household.

Many people are ashamed of their debt, and it can ruin lives. This is why you need to educate yourself on how debt can consume your life, and ensure that you avoid living the rest of your life in debt. If you ever needed a reason to avoid debt, these 3 crazy credit card debt stories will help you to do just that.

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The arrest warrant

In one example, a woman was involved in a minor car accident. When the police officer pulled her over to discuss, he found that her license had been suspended. This meant that she needed to turn herself into court because of outstanding debt. Although different in various states, in the State of Maryland, creditors can use a warrant for civil arrest to bring someone to court who owes them money. If that debtor does not appear after two requests, the creditor can then ask for that person to be arrested. This debt essentially suspended her license.

What is even more ridiculous about this situation is that the debt that was incurred was due to a debt from a yoga class. Although she had tried to cancel it, she had moved and was unable to go cancel in person. This led to her being taken to court twice for the debt, and with added interest and late fees, the balance rose to over $1000.

What we can learn from this, is that even small debts can become big eventually.

Credit card defaulting

For many, being laid off from a job can be the start of debt. In another instance, a woman who had originally been making a salary of $75,000 was suddenly laid off. She had to live off her savings, but then it led to using credit cards as her accounts drained.

Eventually, she began to default on her credit cards. It is known that this is the first debt that people stop paying after losing their job, according to “business insider”. This is often because the car or home loans are more important to pay off to avoid losing a mode of transport, or a roof over their head.

Now, although this woman has gone back to school and works part-time, she is still paying off credit cards after seven years.

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Skyrocketing medical bills

Many people struggle with medical bills that they cannot pay. For example, one young man was a graduate of a university but became injured. He owed over $1,000 in medical debt and had little income or outside support. He then took out a private loan to pay for the medical bills.

This is incredibly common, taking out one loan to pay another. These are typically high interest and make it harder to pay down the debt.

Medical debt is extremely common, with 20 percent of households having medical debt. In addition to this, Americans pay a total of $3.4 trillion in medical care directly from their pockets. The average household pays around $15,000 annually for medical care out of pocket in one year, which is 50 percent more than in 2015. Eventually, this can lead to death because consumers are unwilling to go to the hospital.

Student loans preventing love

Some couples aren't able to get married because of the debt attached to one of the partners. When one partner struggles with 10's of thousands of dollars in debt, it becomes a worry that the other partner will become responsible. The median student loan balance is around $17,000, but for those who have multiple degrees, the cost can soar as high as $500,000. More and more households are finding it harder to manage their debt.

Lovers are having to decide between marrying the person they love or acquiring a lot of debt in the process. In some instances, they must sell their homes and cars to pay off this debt. They do not eat out, and they do not go on vacations. It can be extreme, but the only way to pay off this debt.

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Where does debt come from?

From a variety of different sources, it has been found that debt comes in many different forms. 25% of Americans with debt hold non-mortgage debt that exceeded their annual income. Additionally, 48% suffer from $35,000 or more in total debt, and another 48% have an income of less than $25,000. This is a higher debt-to-income ratio.

When people are asked about their debt, it is found they have had a mainly negative experience. The most common debt-related problems are due to insufficient income, as well as overdue bills, and unmanageable student loans. Debt-related problems typically come with other side effects as well, such as depression, anxiety, and stress.

If there is anything you can learn from these 3 crazy credit card debt stories is that you are not alone. Although it can be difficult, it is essential to take matters into your own hands before it is too late. Debt can be traumatizing, and truly ruin your life, but if you can try to prevent it by knowing what is a possible outcome, you can prevent it.

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If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

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The Debt Hotline

Hosted by Team Solo, The Debt Hotline breaks down debt and personal finance topics with help from attorneys, financial experts, and industry pros. We respond to real questions to help you navigate debt with knowledge and courage.

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