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More consumers are taking on new credit card debt

On Behalf of | Aug 30, 2021 | Bankruptcy |

Over the last year and a half to two years, many Alabama consumers had to adjust spending habits as their financial circumstances changed. A global health crisis resulted in some losing jobs or seeing a significant reduction in pay, but the government did offer some eligible consumers stimulus benefits. For a time, these stimulus benefits boosted consumers’ financial situations, and some were able to reduce the amount they were charging to credit cards.

However, as people spend stimulus money and more consumers return to normal lifestyles, the amount people are charging on their credit cards is also increasing. If you have a significant amount of credit card debt, you may understand that this can eventually have a negative impact on your life. This type of debt can quickly spiral out of control, leaving you with a debt burden you can no longer manage.

More spending, more debt

There are many reasons why consumers reduced credit card spending for some time. In addition to changes in income, some also were eligible for mortgage forbearance, unemployment benefits and even student loan relief. Because of these reasons and others, estimates suggest consumers were able to reduce their credit card spending by approximately 14%. In the second quarter of this year, overall household debt increased significantly, indicating that spending is up.

For individuals who have a significant amount of credit card debt, the lack of additional incoming stimulus money and benefits means they are using their savings to pay off credit card debt. If you are struggling with this type of debt burden, you may be wondering what you could do to get ahead and regain your financial stability. Whether you are still struggling from a difficult year or you have accumulated credit card debt for other reasons, there are legal options available to you.

A better financial future

Through the process of bankruptcy, you may be able to deal with your credit card debt once and for all. Eligible applicants may be able to discharge certain balances, allowing them to emerge from the process with a better financial future in hand. If you believe that you could benefit from bankruptcy, it may be helpful to understand eligibility requirements and how you can proceed with the application process. An assessment of your case can help you understand how this process could benefit you.