What is one possible consequence of financial hardship on consumers?

Financial hardship often leads to significant challenges in managing debts. When consumers experience financial difficulties, such as job loss or unexpected medical expenses, they may struggle to meet their financial obligations, which can result in missed payments, increased debt levels, and possibly defaulting on loans. This instability can create a cycle of financial stress, making it even harder to regain healthy financial practices.

In this context, managing debts becomes increasingly difficult due to limited resources, high-interest rates on unpaid loans, and the accumulation of late fees. As consumers find it more challenging to keep up with their financial responsibilities, they may also face negative consequences such as damaged credit scores, which can subsequently affect their ability to borrow in the future.

This understanding underscores the detrimental effects financial hardship can have on consumers.