A recent survey indicates that people living in the Miami-Fort Lauderdale metro area have more debt than those in the rest of the state and the country. For example, South Florida mortgages have balances over $30,000 higher than the U.S. average. This may be a dangerous recipe leading to more Chapter 7 and Chapter 13 bankruptcy filings.
The new report, completed by Credit Karma, recognizes the higher cost of living for South Florida than some other parts of America. More importantly, however, is the impact of the hot real estate market in Miami, prior to the housing crash of 2007. Many homes were purchased at or near the peak of the market.
As home values descended faster than mortgages, many owners find their home loan balance higher than the value of their property. South Floridians’ extra debt is not restricted to home mortgages.
Average student loan debt, auto loan balances and other debt is also higher than the national average. There is some good news, however. South Florida residents have been consistently paying their credit card balances. South Florida credit card outstanding debt is now over $700 less than the national average.
Skeptics point to the number of bankruptcies and foreclosures as a contributor to this lower than average outstanding debt. They maintain that the large number of charge offs, bankruptcy discharges and canceled cards during foreclosure actions have, at least, helped lower outstanding credit card balances.
Low mortgage and auto loan rates are helping some people better afford their debt. Others are getting education and help from credit counseling services to manage their current debt more successfully. Yet, these higher than U.S. average balances are disturbing if the job market remains stagnant.
Do you have any additional suggestions to help people avoid bankruptcy and better manage their debt? Are there any other tips, beyond strong self-control and consistent cash flow that might help others control and reduce their high-interest credit card debt?
Source: Sun Sentinel, “South Florida more in debt than rest of nation,” Donna Gehrke-White, Sept. 17, 2012