There are many reasons why people in Florida or elsewhere get overwhelmed with credit card debt. The breadwinner could get fired, and household expenses are put on the credit card. A baby is born with complications not covered by insurance, so the bills go on the credit card. Or the college kids move back into the home, expenses go up, and the added expenses go on the credit card.
When credit cards are overwhelming, some people are forced into bankruptcy. There may be fewer people who are going to need that option however. The Federal Reserve reported that for the second month in a row, credit card debt has fallen rather than risen.
Total consumer debt is now $2.705 trillion. That number is hard to wrap one’s head around, but consumers seem to be borrowing less on their credit cards, although a small rise in auto loans and student loans offsets the drop in credit card debt.
To break that down a bit, our nation’s credit card debt was $850.7 billion in July, down from a high of $1.03 trillion in 2008.
The economy is growing, although at a very slow rate. This would seem to have an impact on both our state’s falling number of foreclosures as we posted earlier this week, and also on bankruptcy filings due to credit card debt.
There were other financial trends reported by the Federal Reserve.
- The annual growth rate is 1.7 percent currently.
- Household debt, such as mortgages, has declined for 16 straight quarters.
Even though credit card debt is declining, some people, especially the unemployed or underemployed, may benefit from the fresh start provided by a Chapter 7 bankruptcy.
Source: Florida Today, “Consumers cut credit card use for second month,” Sept, 10, 2012
At our Orlando law office we assist our clients with Chapter 7 bankruptcy filings as well as credit card debt assistance and foreclosures.