Feb 11, 2022 - Economy & Business

Debt management held steady in 2021 despite inflation

Data: New York Fed Consumer Credit Panel/Equifax; Note: Severely derogatory means any of the previous states combined with reports of a repossession, charge off to bad debt or foreclosure; Chart: Baidi Wang/Axios

High demand for high-ticket items that grew even costlier with inflation drove up U.S. household debt by $1 trillion last year. At the same time, debt management held steady.

Why it matters: The pandemic's lockdowns and government aid provided consumers a chance to pay down more of what they borrowed, and to even bolster their savings.

State of play: Roughly 94,000 people had a bankruptcy notation added to their credit reports during the last three months of last year, data from the New York Fed shows. 

  • That’s the lowest since 1999, when the data series began. 
  • The share of borrowers with a third-party collection account also reached a new historic low, while the average balance of those who had collections accounts fell sharply from $1,427 to $1,234.
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