Michigan residents who have been following reports that the economy is recovering may have heard that, at least to some extent, people who have lived through the recent economic recession are now being more conservative when deciding whether or not to take on debt. However, one expert has suggested that living a "debt-free" lifestyle may be the luxury of only a handful of Michigan residents and other Americans who have the income or the assets to be able to do so. Those who do have the money to use cash only to live are, indeed, being more careful when taking on debt. For example, instead of buying that second home, they may instead use lower mortgage rates as an opportunity to refinance and pay off their existing home more quickly.
For the rest of the United States, however, credit and loans are becoming more of a part of everyday life. According to this expert, gone are the days in which a person would use a credit card or a loan to splurge on a one-time luxury item. Now, people in middle-class homes rely on credit to buy the most essential items.
For example, many Americans now find themselves having to rely on credit in order to send their children to college. With tuition rates skyrocketing, student loans are no longer just one option among many; they are rapidly becoming as important to getting into college as the admission application itself. Likewise, in today's America, people need a reliable car. With car prices as they currently stand, many people find themselves turning to financing in order to meet their basic transportation needs.
While bankruptcy cannot solve all of the problems of those who out of necessity find themselves buried in debt, the process can certainly help a family maintain some sense of financial peace and security. Those who are overwhelmed by debt may wish to consider a consumer bankruptcy as a viable option.
Source: Minyanville, "Borrowing just to get by: the worrisome growth of non-discretionary consumer debt," Peter Atwater, June 17, 2014