Bankruptcy

A Look at Consumer Debt Where You Live

By guest-writer

Though the U.S. economy is certainly not in top health just yet, a number of indicators suggest that we may be pulling out of this recession ? but that may be a mixed blessing for many consumers.

Two recent reports (one from the Federal Reserve and one from CareOne Services) suggest that Americans have started spending more, which may be good for the economy overall, but could be a bad thing for individual debt loads.

Consumer Debt, State by State

The CareOne Services report examined 135,000 people across the country who were active in some sort of debt management program in 2009 or 2010 and found that, among that group, the average debt load was more than $10,000 in every state.

Here?s a look at the top of the heap for unsecured debt in the U.S.:

• Delaware: Average consumer debt is $20,233, spread over seven creditors.
• Rhode Island: Average consumer debt is $20,130, spread over seven creditors.
• Maine: Average consumer debt is $19,454, spread over six creditors.
• Alaska: Average consumer debt is $19,225, spread over six creditors.
• Colorado: Average consumer debt is $18,811, spread over six creditors.
• South Dakota: Average consumer debt is $18,707, spread over seven creditors.
• North Carolina: Average consumer debt is $18,536, spread over six creditors.
• Connecticut: Average consumer debt is $17,334, spread over six creditors.
• Wisconsin: Average consumer debt is $16,903, spread over five creditors.
• Alabama: Average consumer debt is $16,591, spread over seven creditors.

The ten states that had the lowest debt totals for those seeking debt settlement or debt management services are:

• California: Average consumer debt is $12,801, to five creditors.
• Michigan: Average consumer debt is $13,328, to five creditors.
• Mississippi: Average consumer debt is $13,512, to six creditors.
• Vermont: Average consumer debt is $13,707, to five creditors.
• Missouri: Average consumer debt is $13,737, to six creditors.
• Indiana: Average consumer debt is $13,945, to five creditors.
• Kentucky: Average consumer debt is $14,028, to six creditors.
• Iowa: Average consumer debt is $14,099, to five creditors.
• Virginia: Average consumer debt is $14,194, to five creditors.
• Tennessee: Average consumer debt is $14,222, to six creditors.

Increased Spending, Increased Debt, Increasing Need for Debt Relief?

During the holiday season, many economists seemed cheered by the increases in consumer spending, but personal finance advocates may find the same numbers troubling. The Fed?s report shows that our nation?s revolving debt (which basically means credit card debt) rose by 3.5 percent in December of last year.

Further, though our total amount of revolving debt apparently dropped in 2010, it dropped by a smaller amount than in 2009. This could mean that people are optimistic about the job market and the economy in general, but it could also mean they?re turning to their credit cards for necessities they can no longer afford thanks to rising prices or decreased income - and risk taking on more debt than they can handle and heading towards bankruptcy.

Full post as published by The Bankruptcy Blog on February 15, 2011 (boomark / email).