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Unmanageable debt can lead some to bankruptcy in California

There are many reasons why people in California have made the decision to file for bankruptcy in recent years. With high jobs losses and lowering home values, many have found that they have unmanageable debt levels, compounded in many cases with a reduced ability to pay. This has undoubtedly caused emotional strain for many in our state during years of recession.

For many in California and across the nation, this unmanageable debt has come in the form of credit cards. In fact, the number of those with credit cards is on the rise after several years of decline. The number of those with credit card accounts is similar to that in late 1999 and early 2000, before the tough economic times began.

At its peak, the nation's credit card debt totaled $866 billion. Recently it was reported at a lower $672 billion, a decade low. This lowering is attributed by some to the fact that fewer people have been able to obtain credit during the economic downturn. This is a fact that is now changing, and some expect the amount of debt to increase. In addition, some credit card companies are now offering credit to lower income individuals, a change from the recent past.

When an individual consumer finds that they have accumulated unmanageable debt, they may seek the protections offered by a personal bankruptcy filing. Such protections include relief from the collection efforts of creditors and harassment. In addition, bankruptcy can offer someone in debt a reprieve to recover financially from a crisis, and a chance to work toward a fresh financial start free from the credit card debt that was holding them back.

Source:, "Credit Card Debt Recovery Sluggish With Incomes Weak," Jason Ma, Nov. 6, 2012

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