Statistics show a large burden of credit card debt among Americans that could possibly be removed with Chapter 7 bankruptcies.
For many families, credit cards provide an important safety net in case of an emergency such as a medical need or a period of unemployment, but using a credit card to meet a short term need can have long term consequences. For example, one study has found that families that went without health insurance at some point in the last 3 years are 20 percent more likely to still have related credit card debt today. Similarly, families where at least one breadwinner went unemployed for 2 months or more in the last 3 years are 14 percent more likely to still have related credit card debt today.
The good news is that Americans’ credit card use and total debt burden has decreased since the recession of 2008. There are many contributing factors behind this trend, including changes in lending practices, changes in consumer behavior, and the introduction of stronger consumer protection laws. Here are some statistics that show this trend:
- 39 percent of low and middle income families faced restrictions like card cancelation, credit limit reduction, or credit card application denial between 2009 and 2012.
- Consumers held an average of 1.96 credit cards per person in 2012 compared to 3.7 in 2009
- Only 35 percent of students owned a credit card in 2012, compared to 42 percent in 2010
- Only 55 percent of families had a balance on their credit card in 2010, compared to 61 percent in 2007
- In 2012, the average credit card debt for a low or middle income family was $7,145. In 2008 it was $9,887.
However, for individuals who still are still struggling with credit card debt, the above statistics and trends may not be very encouraging. Paying down credit card balances can be a slow and frustrating process, especially if another financial emergency occurs and disrupts your efforts.
The good news that many families and individuals can benefit from Chapter 7 bankruptcy to get rid of their credit card debts for good. Many other types of unsecured debts can also be discharged in Chapter 7, such as medical bills, personal loans, pay day loans, utility bills, and even unpaid taxes that are more than 3 years old.
If you are interested in exploring the possibility of using Chapter 7 bankruptcy to eliminate your credit card debts, contact an expert California bankruptcy attorney today. Your attorney can help you understand the income limits and other filing requirements that affect this type of bankruptcy, as well as the impact bankruptcy will have on your financial future.
