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Less credit card debt paid off last quarter than during recession

As the economy seems to be slowly gaining traction, it may be easy to think that the debt load of people in Tennessee and around the country is getting lighter. This positive feeling can be buttressed by the fact that Americans paid off $32.5 billion in credit card debt last quarter. However, though that number may be impressive, that figure is less than the amount of credit card debt that was paid off by Americans at the end of the recession. In fact, Americans are expected to collectively accumulate $42 billion more in credit card debt by the end of this year compared to last year.

According to CardHub, the average American household carries more than $6,600 in credit card debt. Though some may think this is the result of reckless spending, this is not always the case. Some in Tennessee, for example, may rely on their credit cards during unemployment or to pay for medical expenses, but high interest rates make it difficult for them to make the minimum payments. When this happens and delinquent payments rack up, creditors can start to harass debtors, leaving them fearful for their financial futures.

Those facing financial challenges related to credit card debt should not panic. The legal system provides these individuals with a way to relive their debt and give them the second chance they deserve. Oftentimes this means filing for bankruptcy, which many wrongly refuse to consider.

Bankruptcy, however, can stop creditor harassment and give those struggling with debt the fresh start they need and deserve. In a Chapter 7 bankruptcy, for example, assets, except for those that are exempt, may be sold and the proceeds may be used to pay off creditors. Any debt left over after this process is completed may be eliminated, leaving an individual free of debt and ready to take on his or her new financial life.

Source: Time, "The credit card bomb just waiting to go off," Martha C. White, June 11, 2014

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

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