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Can Chapter 7 bankruptcy help with high debt-to-income ratios?

Credit cards are a convenient way to help bridge the gap between expenses and income. Unfortunately, these handy cards also make it incredibly easy to get into debt. While anyone of any age in California can find themselves in need of debt relief through Chapter 7 bankruptcy, some people could be have more of a need than others.

The average American has $5,331 in credit card debt. To make matters worse, most people do not -- or cannot -- pay off their balances in full every month. However, those between the ages of 45 and 54 could be struggling more than their younger and older counterparts. Even though this age group is rapidly heading toward retirement, they carry a little over $9,000 each. By age 75, average credit card debt declines to $5,638, closer to the national average.

Age is not the only contributing factor to average credit card debt. As might be expected, debt generally increases with income. However, this might not be as big of an issue as some might expect. Those who earn more tend to have lower debt-to-income ratios, while those living on lower wages might owe less overall but have a higher ratio of debt-to-income. Having a higher debt-to-income ratio can be extremely difficult, especially if credit card debt eats up much of a person's disposable income.

Around 83 percent of people in America have at least one credit card, so the average California consumer is not immune to falling into debt. It can be especially hard for those with lower incomes. Those who fall below the median income level in California might qualify for Chapter 7 bankruptcy, which can discharge debts and improve individuals' financial situations.

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