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Shaky economy forcing people to spend less

People in Essex County have likely experienced financial setbacks just like so many Americans have in the last few years. Although there have been some improvements in the economy, many people continue to struggle with their finances.

The Federal Reserve recently announced that credit card debt decreased by 5 percent in June. Although that would seem to be optimistic news, experts say it shows that concerns about the economy are causing consumers to put less money on their credit cards. Total credit card debt now sits at $864.6 billion.

Student loan debt, on the other hand, has continued to climb. As of March, student loan debt reached more than $900 billion. Shockingly, since the middle of 2008, student loan debt has increased 54 percent.

Total consumer borrowing also increased in June, mostly due to auto and student loans. It reached $2.58 trillion, according to the Federal Reserve.

These numbers are evidence that unemployment remains a major problem. Although 163,000 jobs were added in July, the unemployment rate continues to be high, sitting at 8.3 percent.

People in Essex County who have been laid off or unable to find work know how difficult it can be to manage their finances when they have little to no income. Debt amounts can quickly get out of control.

Although people who are struggling with their finances may feel helpless, there are places to turn for help. Filing for Chapter 7 bankruptcy may be the best solution for some. By filing for Chapter 7, people can eliminate their credit card debt and begin down a path to financial stability.

Source: USA Today, "Consumers cut back on credit card use in June," Christopher S. Rugaber, Aug. 7, 2012

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