Consumers saving more, but also have credit card debt
An April 2016 survey suggests that people are trying to save more money, but more of them also have increased credit card debt. These two facts may eventually create a conflict. The survey looked at 1,600 adults. More than one-quarter reported making an effort to save more, and this was up slightly from the previous year.
Almost 70 percent of people said they were putting money into an account that was not for retirement. However, there was a 3 percent increase over the preceding year in the number of customers who reported carrying more than $2,500 in credit card debt each month.
The president and CEO of the National Foundation for Credit Counseling said that while savings are important for stability, credit card debt that lasts month after month undermines that. The Federal Reserve reports that credit card debt rose during February 2016. The president and CEO of the BECU credit union called the trend for savings encouraging but also expressed concern about credit card debt.
For many people, credit card debt along with other types of debt such as mortgages, auto loans, medical bills and other obligations can become overwhelming. Filing for bankruptcy can in some cases be a solution, and it can put at least a temporary halt to creditor harassment and collection activities. The two primary forms of consumer bankruptcy are Chapter 7 and Chapter 13. The latter form may be more suitable for a debtor who has a regular and dependable source of income, as it entails restructuring obligations pursuant to a court-approved plan that lasts from three to five years. An lawyer can assess a client’s circumstances and determine if that chapter would be appropriate.