According to a survey by Charles Schwab, members of Generation Z in California and elsewhere around the country owe lenders an average of $4,343. That amount increases to $11,663 for those who are between the ages of 21 and 25. In addition to being in debt, roughly half of those who were surveyed had less than $250 in savings. Individuals who are between the ages of 16 and 25 are generally gaining the ability to make financial and other types of decisions for themselves. Therefore, it is important that they understand how to manage their debt.

As a general rule, student loans and mortgages are seen as good debts. This is because they tend to be less expensive and may offer tax advantages. Credit card debt is regarded as something that a person doesn’t want to have. The major drawback is the high interest rates that credit card companies charge. However, those who took part in the survey seemed to have the opposite opinion about these types of debts.

About 20 percent of the respondents said that home loans were bad debt while 40 percent said that student loans also were bad debts. Of those surveyed, 27 percent said credit card debts were a good debt. No matter the type of debt a person has, it should ideally account for no more than 36 percent of his or her income.

Individuals who are deep in credit card or another type of debt may find filing for bankruptcy an effective way to achieve debt relief. In a Chapter 13 bankruptcy case, it may be possible to reorganize credit card debt and repay it over a period of three or five years. If there is a balance remaining after three or five years, it may be discharged. Debtors may keep property such as a home in a Chapter 13 bankruptcy case.