There is some good news for Arizona families struggling with debt - the amount of consumer debt, including mortgage and credit card payments, has decreased to a level at par with that of 2006. In fact, less than 16 percent of household income after tax goes towards debt payments, the lowest it has been since 1984.
However, economic recovery is not happening as fast as many would like it to. Job growth is still slow and incomes remain constant. Though many families have shed their debt, there are still some who are struggling with the threat of foreclosure and wage garnishment at a time when incomes are low. Filing for bankruptcy may be the best option for those who have been unable to shed their debt. Doing so could allow them to keep their house and household possessions, such as cars and furniture, in Chapter 7bankruptcy.
Because of the economic uncertainty most consumers have been through in the last five years, few are willing to go on a shopping expedition any time soon, even though surveys conclude they are more positive than they have been at any point in the past few years. This cautiousness may be well founded, as economists warn consumers of a potential for a serious economic slowdown due to economic events happening outside the country.
As one chief investment officer at a private bank stated, it is time for individuals to live within their means, as living outside them did not work out. However, it is possible for circumstances outside of an Arizona resident's control to cause bills to pile up, such as losing a job, a sudden illness or death. They should take whatever steps necessary to regain control of their financial life, including filing for Chapter 7 bankruptcy.
Source: Los Angeles Times, "U.S. families' debt loads decline to pre-recession levels," Don Lee, Oct. 15, 2012