The rich are getting richer, and everyone else is going deeper into debt trying to keep up.

The bottom 95% of Americans have seen debt levels balloon compared to their earnings over the past 20 years or so, as falling incomes made them more dependent on credit to maintain their lifestyles.

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Consumer borrowing fell slightly in the third quarter as Americans continued to shed their debt burdens in the face of a struggling economy.

Household debt totaled $11.66 trillion in the three months ending in September, down $60 billion from the previous quarter, according to a report released Monday by the Federal Reserve Bank of New York.

"The decline in outstanding consumer debt reveals that households continue to try and deleverage in the wake of a challenging economic environment and large declines in home values," said Andrew Haughwout, vice president in the Research and Statistics Group at the New York Fed, in a statement.

But while overall debt is declining, the number of people who are failing to keep up with their payments rose in the third quarter. The delinquency rate stood at 10% in the end of September, up from 9.8% in June. About $1.2 trillion of consumer debt is currently delinquent, according to the report.

Credit cards: Credit card debt fell slightly to $693 billion, a marginal change from last quarter. And the number of open credit accounts fell by 6 million, 23% down from its peak in 2008.

That could mean banks are closing down delinquent accounts, according to Bill Hampel, chief economist at Credit Union National Association.

"I suspect that accounts closed are mostly the behavior of lenders as opposed to the borrowers, because they could not collect anymore," said Hampel.

At the same time, the number of credit inquiries increased, reflecting a strong demand for credit.

Real estate: Mortgage borrowing fell by $114 billion, 9.6 % below its peak, as people continued to shun home buying in favor of renting.

The number of people signing up for new mortgages fell 17%, the lowest level since mid-2000.

Meanwhile, existing homeowners are borrowing more. Home equity lines of credit increased by $14 billion during the quarter.

Student loans: Student debt rose to $865 billion, up from $845 billion from the previous quarter.

Between 2010 and 2011, undergraduate students, received an average of $4,907 in federal loans according to a College Board survey. Graduate students, the Board said, received $16,423 on average.

"About a third of students graduating this year have so much debt that they still could be repaying it when their children enter college," said Mark Kantrowitz, publisher of FinAid.org.

The uptick in college borrowing is typical in a down economy, said Lauren Asher president of the Institute for College Access and Success. People tend to seek more education and training in hopes of landing a better paying job.

But the additional education is no guarantee to higher paying employment, Asher said.

"A college degree is still is very good investment, but like any investment, you are not sure of your returns," she said.

Debt relief has become necessary throughout America. Americans carry over $850 billion in credit card debt, according to the Federal Reserve. Debt is a national problem, but also an individual one, too. We may aim to pay off our credit card debt in full each month, but too many of us don’t succeed.

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Stocks dipped on Monday as lawmakers remained in a standoff over raising the debt ceiling to avoid default, but investors were convinced a compromise will be reached before next week’s critical deadline.

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Home foreclosures fell 29% to 1.17 million during the first six months of this year compared to the first half of 2010, according to RealtyTrac’s Midyear 2011 Foreclosure Market Report. The findings also show foreclosures for the second quarter to be the lowest since the end of 2007.

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