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With consumer spending growth comes credit card debt

Consumer spending tendencies are measured by analysis of credit card debts, and the latest figures apparently show a rapidly improving economy. However, the analysis indicates that a significant percentage of consumer spending is done with credit cards. While this fuels economic growth, it may lead to more consumers in Washington and other states considering Chapter 7 or Chapter 13 bankruptcy due to overwhelming credit card debt.

A new study shows that American consumers spent 35 percent more on their credit cards from the 2013, third quarter, through the third quarter in 2014. The results indicate that during the past five years, only the third quarter of 2011 showed higher figures of credit card spending. The amount of debt accumulated by consumers has shown a constant growth over the past four quarters, compared on a year to year basis.

It appears as if more consumers are able to maintain payments on their credit cards as only 2.89 percent of credit card debts have been moved off the books of credit card providers as charge-offs. There are many bits of advice as to how consumers could get rid of credit card debt, but the truth is that most methods take months or even years before a consumer may be debt free. Getting there often involves using emergency funds, savings or life insurance. Those who are already facing overwhelming credit card debt may benefit from obtaining information about the protection of personal bankruptcy.

An experienced Washington bankruptcy attorney will assess the financial situation and explain the pros and cons of a bankruptcy filing. He or she will guide the consumer through a means test to determine potential eligibility for a Chapter 7 filing. A Chapter 7 bankruptcy will typically allow a consumer to wave goodbye to credit card debt, though some assets may be liquidated. An alternative for consumers with a regular income is Chapter 13 bankruptcy that will require the consumer to continue paying his or her debts but over an extended period. A repayment plan over three to five years has to be drafted and presented to the court, and if accepted and payments are maintained, the filer could emerge from bankruptcy proceedings with a firm foundation for financial stability.

Source: hcplive.com, "Americans Rack Up $15B in Credit Card Debt in Past Year", Jared Kaltwasser, Dec. 25, 2014

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