Lots of American families are underwater…and not just on their mortgages.
About one out of every five U.S. households owe more on credit cards, medical bills, student loans and other debts not backed by collateral than they have in savings and other liquid assets, according to a new University of Michigan report published Tuesday.
The precariousness of Americans’ financial situations has become increasingly on display since the mortgage crisis precipitated the Great Recession. As home prices fell, many borrowers found they owed more than their homes were worth, spurring some to simply walk away. About 23% of borrowers were underwater at the end of 2011, according to CoreLogic.
Though the Great Recession has ended, many families remain in tough financial spots.
“Some families have not been able to make substantial headway,” said Frank Stafford, co-author of the report. “Even if they’re not underwater with their mortgages, they are struggling to…
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