Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is the means test?”
For years now, news reports have discussed how Americans are turning away from debt, gradually paying down mortgages and credit cards given the sour economy. Though debt levels undoubtedly fell since the beginning of the financial crash, things appear to have turned a corner recently.
According to an article in The Atlantic, Americans took on more debt in the last few months than they have at any point since 2008. The numbers show that during the third quarter of 2013, total consumer debt in the United States rose by $127 billion to a total of $11.28 trillion.
That increase amounts to the largest rise since the first quarter of 2008, just before the financial crisis began to gather steam. Of this $127 billion increase, several categories of debt contributed to the rise. For one thing, the mortgage market expanded quickly during the recent quarter, with mortgage debt rising by more than $56 billion. During the same period student loan debt continued to increase, jumping by $33 billion. Finally, another large category of debt, auto loans, also rose by $31 billion.
Some experts have lamented the increase in debt levels, saying that it was debt that caused the country to slip into the financial crisis in the first place. Much of the problem was that companies and individuals were too leveraged, meaning they had far higher debt levels than they could reasonably hope to pay off.
However, others note that a rise in debt levels is actually a good thing because it is critical to restarting economic growth. The reality is that capitalism functions because of debt and without easy access to credit the American economy will never truly rebound. The hope is that consumers feel comfortable enough to begin borrowing again which will stimulate hiring and eventually return the country to solid economic growth.
The worry is that consumers take the borrowing too far, potentially amassing more debt than they can handle, a prospect that raises the likelihood of possible future increases in bankruptcy filings. Whether the debt increases will continue at such a pace remains uncertain, but you can bet the numbers will be watched carefully by economists for signs of trouble.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.
“Americans Are Now Taking On More Debt Than At Any Time Since 2008,” by Matt Phillips, published at TheAtlantic.com.
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