Some Arkansas consumers may have joined millions of others in spending more than they intended to over the holidays. Unfortunately, spending may lead to more debts and more bills. January is typically the month when consumers start strategizing on how to pay their credit card debt. Out of desperation, some consumers resort to digging into their emergency funds or life insurance to pay credit card debt.
Surveys indicate that the credit card crisis nationwide, and including in Arkansas, has not ended. There may be more people watching their step and using credit more judiciously these days, but according to one survey by a national credit counseling foundation, a full 20 percent of those surveyed indicated they had to rely on credit cards to make ends meet. Thus, it's clear that some consumers will benefit by the bankruptcy remedy, which is an effective and powerful way to wipe out large amounts of unsecured credit card and medical debt very quickly.
In the next few years, the credit scores of people caught up in foreclosures or other financial crises during the recession, will begin to improve substantially. Not only does negative information generally fall off of one's credit record within seven years, but many people in Arkansas and elsewhere have been able to beat that clock and improve their records at a much quicker pace. According to some observers, the loosening of credit has already begun and massive new instances of defaulted credit card debt may be re-emerging.
One fallacy about bankruptcy is that the debtor will never get credit again. That's not true for the vast majority of people who have successfully completed a consumer bankruptcy. Whether you file in Arkansas or another federal bankruptcy district, there is a good likelihood that you'll be able to restore credit fairly soon after the case is discharged.
Many people immediately assume that someone who carries a lot of credit card debt is an irresponsible person, or that they simply don't understand "the concept of money." To be fair, these stereotypes could be true of some people. But there are many people out there who are carrying credit card debt because they had to make an unexpected or extreme purchase for their livelihood, or for the betterment of a loved one.
A new report on credit card debt in the United States has been released, and the numbers do not paint a pretty picture. According to the new report, Americans paid off $32.5 billion in outstanding credit card debt in the first three months of 2014. You may read that figure and think that this represents a major achievement -- but it's 1 percent less than was paid in the same timeframe in 2013 and 5 percent less than the same timeframe in 2012.
We've all dreamed of it. "Maybe I just won't pay that bill. Maybe I'll just let that debt sit for awhile and, hopefully, they'll forget about it. That could work... right?"
It is easy to think that people who carry significant credit card debt are bad with their money. Many people may assume that these debt carriers simply can't curb their personal spending habits, or that they can't recognize when they need to save their money for a more important time.
There is some uplifting news in the world of credit card debt -- if you can believe that. Gallup performed a random credit card poll on 1,026 adults. There were some crucial findings from this poll, the first of which is that 29 percent of Americans do not own any credit cards, which is the highest rate since 2001. In addition, the average number of credit cards that a card-carrying American owned is 3.7, which is less than what was reported in 2001.