Two-thirds of Americans would consider bankruptcy to jettison debt stress

The burden of debt, especially during a higher-interest-rate environment, is weighing on the mental health of millions of Americans.

Ahead of World Mental Health Day Tuesday, a new poll from Forbes found that 54% of respondents are always or frequently stressed because of their debt and two-thirds would consider bankruptcy as a way out.

More than three-quarters of U.S. households have some level of debt and with no certainty from the Fed on the direction of travel for interest rates, the cost of living and servicing increasing debts is overwhelming for many.

They report sleep problems (48%), higher levels of anxiety (40%), and negative impact on their social lives (38%) among the results of their debt burdens. More than one-third reported depression and 60% have disagreements in their relationships because of their financial situation.

While four in ten are optimistic about being debt-free within five years, 72% said they are more likely to accumulate more debt while experiencing stress.

CREDIT CARDS

Credit cards and personal loans are a big chunk of the debt held by survey respondents at 72% and 68%, respectively, while mortgage (66%) and medical bills (55%) are also major factors.

While almost half of poll participants say that advertising and consumerism drive their borrowing, four in ten admit that their inability to track and control their spending is the main reason for their debts.

Among the main ways to address their debt issues, 50% said they would get a second job, with almost as many planning to sell property or use an inheritance to become debt-free.

A recent survey by diversified financial services provider Thrivent revealed that rising levels of personal debt and the economy are driving more Americans to prioritize their financial needs.