During elections seasons, many in California and across the country hear facts and statistics about the national debt which may sound frightening. However, some economists are recommending that consumers examine signs of danger in their own finances. These economists are noticing a disturbing trend in consumer spending. According to recent reports, many Americans may be carrying unmanageable debt, and it seems to be getting worse.
Last week, the Federal Reserve released its quarterly report that showed consumer borrowing increased by more than $12 billion in June, bringing household debt to over $12.3 trillion. This is alarming to some because it is nearing the levels that existed at the beginning of the recession in 2008. Among the largest areas of increased debt are auto loans and credit card debt. Credit card debt alone went up more than $7 billion.
While consumer debt makes up almost 70 percent of the country's economy, some experts are nervous about the recent increase. When more households have a negative net worth, it can mean trouble for the nation's economy, as well as for the individuals. Additionally, economists worry that an increasing number of consumers are falling behind in their payments and are unable to catch up.
Most people in California see the signs when they have unmanageable debt. They begin to skip payments or use one credit card to pay another. They may receive calls from lenders telling them they are late on payments or their accounts are being sent to collection agencies. When these things happen, many contact lawyers to discuss getting their debt under control. A knowledgeable attorney will review the many options available for reorganizing or eliminating debt.
Source: whig.com, "Household debt concerns economists, lenders", Aug. 8, 2016