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U.S. consumer debt soars to new highs

A report released on Aug. 7 by the Federal Reserve reveals that the U.S. economy grew by 2.6 percent during the second quarter, but some experts are worried about the amount of revolving debt being carried by consumers in Virginia and the rest of the country. Consumer activity accounts for about 70 percent of the nation's economic output, and the data suggests that much of this spending is being done using high-interest credit cards.

Revolving debt tends to grow when families are struggling to make ends meet, but the Federal Reserve data shows that the economy added more than 200,000 jobs in July and unemployment around the country has now fallen to a 16-year low. However, these impressive figures were not enough to prevent revolving debt from climbing by $4.1 billion to $1.027 trillion during the second quarter. The nation's revolving debt surpassed $1 trillion in November 2016 for the first time since the 2008 financial crisis.

Some experts say that consumers are turning to their credit cards more often because wages have not kept up with inflation in recent years, and figures from the Department of Commerce reveal that incomes grew in June at their slowest pace in seven months. Overall, consumer debt in the United States not including loans secured by real estate grew by $12.4 billion in the second quarter of 2017 and now stands at $3.86 trillion.

The credit card trap can be difficult to escape, but consumers often delay pursuing debt relief because they worry that filing for bankruptcy could make future borrowing difficult or impossible. Attorneys with experience in this area may dispel the many myths and misconceptions surrounding personal bankruptcy, and they could also explain how a Chapter 7 or Chapter 13 petition puts at least a temporary stop to creditor harassment.

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