Getting ahead in life often feels impossible. California consumers tend to grow frustrated when faced with the limitations of their own finances during certain times of the year, particularly those that involve traditions centered around shopping. As data from the 2018 holiday shopping season rolls in, it is possible that some consumers might need to consider the benefits of pursuing Chapter 7 bankruptcy.
The Federal Reserve recently announced that consumer credit debt had risen to more than $4 trillion -- a new record. Revolving credit played a smaller role than might be expected in this increase, though. Consumers added only 2 percent to their credit cards -- a form of revolving debt -- in Dec. 2018, compared with 11.7 percent in Oct. of that same year.
Nonrevolving credit -- including fixed debts like student loans and auto loans -- actually increased more than revolving debts. Consumers increased these debts by about 6 percent in Dec. 2018. However, these figures do not include mortgages, which are a significant chunk of household debt for many people.
Some people might compare the rates of increase in consumer debt between Oct. and Dec. of 2018 and come to the conclusion that spending habits in California are actually doing quite well. Unfortunately, isolating certain months only tells part of the story. The reality is that regardless of how much or little consumer debt rose in a given 30-day period, it is now at a record high, which can put pressure on the average person.
Some people in California might feel empowered to tape lines of credit because of current low rates of unemployment and relatively steady wages. However, debt can easily spiral out of control, putting even the most financially secure individual in an incredibly difficult position. When repaying debts becomes too much and creditors are calling more often than not, Chapter 7 bankruptcy can provide a secure and proven path to debt relief.