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Increase in personal debt may call for bankruptcy

When surveying a Washington individual's financial state, personal debt can be a tricky factor. For some people it can be a creeping progression that inches up week by week or paycheck by paycheck, as in some places the cost of living skyrockets while income remains stagnant. For others, a single emergency or catastrophe can plunge an otherwise financially literate person into the depths of debt. In some instances, bankruptcy can be the most appropriate path to debt relief.

Clues that consumer debt is picking up surfaced in numbers from Dec. 2014. Credit not related to mortgages shot up to $3.3 trillion in the United States from a previous $14.7 billion. These numbers were reported by the Federal Reserve, but they may not be the pique -- some experts estimate that non-mortgage debt could still go up another $15 billion. 

Debt involving student loans and other types of credit -- commonly referred to as non-revolving credit -- was placed at $2.42 trillion. Last reports put that number at only $8.9 billion. Conversely, revolving debt saw one of its largest increases in recent months. Last cited as $5.8 billion, the most recent report puts credit card and similar debt at over $887 billion. Although it's possible that some of this increase could be attributed to the recent decline in gas prices, there does not appear to be any clear evidence for the specific cause of the rise.

Whether a person is faced with an unexpected emergency or wakes up to the realization that years of continual debt has finally caught up with him or her, personal debt can be devastating to a person's life. Some people in Washington find that seeking out bankruptcy can be a highly effective course of action for much-needed debt relief. With debts cleared away in a Chapter 7 or reorganized into manageable payments in a Chapter 13, those once suffering under the burden of overwhelming debt may be able to breathe freely once again.

Source: USA Today, "", Paul Davidson, Feb. 6, 2015

Tags: Chapter 13, Chapter 7, Debt relief, bankruptcy, income

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