In the past, individuals and families struggling with debt were usually battling high credit card balances and interest rates. For the first time, student loans have taken the position of the number-one unsecured debt owed by Americans. According to the Federal Reserve Bank of New York, more than 11 percent of the $956 billion in current student loans are now in default. Credit card delinquency, on the other hand, has dropped in number for the last four years.
When it comes to a serious injury or illness, there is no such thing as a small medical bill. People trying to recover their health often find they have been stricken again; by credit agencies that use those medical bills as a reason to cut credit ratings and portray the debtor as a poor financial risk. An Ohio woman whose $6,200 medical debt tanked her credit rating got Congress' attention and began what has become an odyssey to amend the Fair Credit Reporting Act.