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Economy shows improvement, but consumers still in debt

Coloradans know that when expenses are significantly more than a family's income, the family is likely to experience severe financial challenges. Those challenges can take a number of forms, including mortgage loans, car payments and significant credit card debt. When this combination of debts reaches an unbearable amount, seeking bankruptcy protection may be a necessary and helpful option.

Generally speaking, three years into the recovery process from the worst U.S. financial crisis since the 1930s, American families and their financial situations have started to improve. Federal Reserve figures show that debt payments are smaller than they have been in 18 years, and the rate of delinquency for credit card payments is the lowest since the start of the recession.

There are other general signs of improvement. For example, retail sales are up, and so are asset prices. The housing and automobile markets are stronger; consumers have demonstrated a more optimistic outlook; and foreclosure numbers are down. All of these signs suggest that the economy may be recovering.

Still, while some Americans are beginning to look positively toward the future, other people are undeniably struggling. Individuals who are saddled with heavy credit card debt are also facing a dismal credit rating, and the threat of losing a house to foreclosure is still a reality for many people.

Lakewood-area residents who can't relate with the recent good news regarding the economic recovery should consider their options for filing for personal bankruptcy. Chapter 7 and Chapter 13 offer specific protections for individuals' unique situations.

Source: Bloomberg, "Consumers Paying Down Debt Helps Boost U.S. Expansion," Rich Miller, Oct. 15, 2012

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