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More people falling behind on their credit card payments

An increasing number of people in Massachusetts are falling behind on their credit cards. This is concerning for banks because it may indicate that more delinquencies may also occur with other types of loans.

According to the New York Federal Reserve, several large credit card companies and U.S. banks reported increases in their delinquency rates for credit cards in August. This increase in the delinquency rate was the second month in a row. Capital One reported a delinquency rate increase from 3.87 percent in July to 3.97 percent in August. JPMorgan reported an increase to 1.16 percent in August from 1.15 percent in July. Discover reported an increase to 2.1 percent in August from 2 percent in July.

Because the U.S. is currently near full employment, banks have been relaxing their credit approval standards and have extended credit to an increasing number of people with poor credit scores. Experts worry that as Americans take out more and more debt while the economy is good, they will have trouble repaying it when the economy is poor.

People who are overwhelmed by their credit card debts might want to consider filing for personal bankruptcy. Most unsecured debts can be discharged in bankruptcy, allowing people to enjoy fresh financial starts. People who are unable to make their credit card and other payments might benefit by speaking with experienced bankruptcy lawyers who can advise their clients about the different bankruptcy options. They may also explain whether bankruptcy is the most appropriate choice or if there is an alternative. There are a variety of eligibility and other requirements that counsel can outline.

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