It appears that Americans are paying less on mortgages, credit cards, and other loans. New Jersey residents who are still facing foreclosure and bankruptcy may not agree, but overall, it appears that families are getting back on their financial feet. The question then becomes whether or not people are willing to start spending again.
Most Americans have spent the recession pinching pennies, and as a result consumer spending fell in the last four years as families focused on paying down their debts rather than making new purchases. According to a recent analysis, however, that process seems to be over; many couples eliminated their mortgages through foreclosure, and many more successfully paid down their credit card debt.
Whether all of this means that people are ready to start spending on luxury items again remains to be seen. Food and gas prices are still rising, but paychecks are not rising to meet those increases. With the possible expiration of certain tax exemptions, some people could also be paying more taxes next year. These factors may keep some cautious households from spending. The simple fact is that there are still numerous Americans who are still struggling day to day.
Many Americans, including New Jersey residents, are still facing the possibility of foreclosure and are still struggling to pay their bills. For people who, through no fault of their own, find themselves unable to recover financially from the recession, bankruptcy may be a viable option to get back on track. Filing for bankruptcy protection may give a struggling family some much needed relief from their financial burdens. Each situation is different, and those families who find that their debts have outdistanced their income and assets would do well to seek advice concerning various debt relief strategies to overcome their financial difficulties once and for all.
Source: The Huffington Post, “Household Debt At Lowest Level Since 2006, Consumers More Comfortable Spending Again,” Catherine New, Oct. 15, 2012