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Economy shows some signs of recovery

Consumer debt levels and types are often used to measure overall consumer confidence and the health of the economy to some point. This is true both in Oregon and nationally. When people are more confident, they can be more willing to take on new debt. While this can be a good thing, too much credit card debt can eventually be problematic and leave some debtors facing creditor harassment and other financial challenges.

Recently released information from the Federal Reserve Bank of New York reported on the four major types of consumer debt—mortgages, automobile loans, credit cards and student loans. In the first three categories, numbers from the first quarter of 2014 show substantial decreases in the amount of money owed by consumers around the country compared to the prior year. Even student loan debt levels had been observed to drop but this debt now represents the category with the highest level of debt overall, a switch from prior years.

In the third quarter of 2008, people around the nation collectively owed $9.99 trillion to mortgages. Currently that figure is now at $8.6 trillion and includes both home equity loans as well as first mortgages. Late payments to credit cards are also down and actually at their lowest level yet since the report began tracking them in 2003. The rate of automotive loans being issued to buyers between 22 and 25 years old is at its highest since 2008.

While these may be good signs, the reality of financial troubles still exists for many people. When even minimum payments are too much to handle, help is needed. Talking to a lawyer may be able to open up options for debtors in such situations.

Source: The New York Times, “Consumer Debt Suggests Growing Confidence,” Floyd Norris, May 16, 2014

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The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 19 years.

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