When the great recession hit, more people found themselves struggling with serious financial problems. They may have lost their jobs or seen their hours reduced, making it difficult for them to have a stable source of income. Because of this, many people had to create strict budgets that allowed them to better track where they spent their money each month.
Now, as the economy shows signs of a rebound, individuals are once again finding themselves spending money more freely. When they have resources available, it is not a problem. However, research has shown that people are taking on more credit card debt, which could lead to serious financial concerns should they be unable to pay down these balances.
According to CardHub.com, cardholders are on track to add $47 billion in credit card debt this year. Additionally, the study found that repayments to card companies have also decreased substantially this year. These two trends could mean that more people are going to find themselves stuck with high credit card balances.
If the cardholders are only paying their minimum payments, their debts will continue to gather interest. This may lead individuals to consider other options to help deal with the challenges that this can cause. Some cardholders may try to negotiate with the companies in an effort to reduce their balances, but some companies may refuse to agree to these types of arrangements.
Some may consider filing for bankruptcy. Filing allows these debtors to rebuild their finances by eliminating all of their dischargeable debt. Individuals may be able to keep their property, depending upon the type of bankruptcy their file.
Those who are having difficulty paying their bills may be unsure of the options that are available. Speaking to an experienced bankruptcy attorney can help them learn what is best for their situation.
Source: Source: San Antonio Business Journal, “Americans are piling up credit card debt, Card Hub says,” W. Scott Bailey, June 11, 2013.