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Detroit-area consumers are racking up less debt, in some areas

Over the last several months, residents of Detroit and the surrounding suburbs of the great Michigan city have bucked the national trend of racking up more debt. While other cities have seen an increase in consumer debt of up over 6 percent, Detroit residents on the whole remained relatively conservative spenders, actually decreasing their overall average consumer debt ever so slightly, by .7 percent.

However, when one breaks down this number further, a person can see that Detroit households may still have to worry about the looming specter of a personal financial crisis. According to reports, what appears to have kept the brakes on consumer debt is a weak housing market that continues to recover.

For example, people in the area around Wayne County reduced their debt on a primary mortgages by 1.4 percent. This means the people are still hesitant to invest in a new home and are instead opting to build equity in their current residences, assuming of course that they are homeowners at all. Moreover, people stayed away from home equity loans or so-called "second mortgages," and debt in that sector went down 7 percent.

On the other hand, credit card increased substantially, by almost 7 percent. Residents were also more willing to take out a car loan, and the amount of debt in this sector also increased almost 7 percent. Although some see this as a hopeful sign that the city will recover from its economic crisis, it is also cause for concern given the cyclical nature of the American economy.

As the economy recovers, consumer debt will probably increase, meaning that people will, for better or worse, run the risk of a financial crisis. In such a crisis, however, they can use bankruptcy as a viable option to get debt relief.

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