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American credit card debt drops, but many still struggle

A new report from the Federal Reserve shows credit card debt amongst Americans dropped for the second month in a row. In July, credit card debt dropped $1.8 billion to around $850 billion. The fall comes after a $3.7 billion decrease in credit card debt in June. Economists suggest Americans may still be hesitant to use credit cards to make discretionary purchases, and instead are reserving their use only for necessities. Weak job growth and minimal wage gains have also led many to forego using their credit cards. While this is a promising statistic, many Americans still have difficulty managing their Credit card debt.

With a sluggish economy and high unemployment, many Americans find themselves facing financial challenges. During these times, many may have trouble paying their expenses and may come to rely on credit cards to get by. However, high interest rates coupled with a decreased income can lead to a dire financial situation where making minimum payments on credit card debt is impossible. When this happens, creditors can harass the individual and delinquent notices can lead to a spiral of depression and fear for the individual's financial well-being.

Fortunately, those struggling with credit card debt have options available to them to obtain debt relief. Perhaps the best option is to file for Bankruptcy. Filing for bankruptcy may seem scary, but the process may allow the individual to shed debt and reach a fresh financial start. Through a Chapter 7 bankruptcy, the individual's assets are sold and the profits are used to pay creditors. Typically, any debt remaining after the sale is forgiven. This can be a huge lifesaver to a person who has been drowning in credit card debt for years.

Consulting with a Colorado bankruptcy attorney can help clarify the bankruptcy process. An experienced attorney can walk an individual through the process, explain any exemptions that may apply to the individual's case, and file the necessary documents on the individual's behalf. This help can be emotionally comforting and financially priceless, as being free of creditor harassment and a compounding mound of debt can buy piece of mind.

Source: The New York Times, "Credit Card Use Falls; Borrowing for Cars and School Rises," Sep. 9, 2013

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