Recent upswings in consumer debt levels in Jefferson County, Kentucky, and elsewhere throughout the United States appear to have ended. Caution among consumers in their spending and borrowing habits appears to have caused consumer debt levels to have plateaued.

Cautious spending and the repayment of existing debt might be helping individual consumers to meet their financial challenges, but it is slowing the national economy. An increase in consumer spending would boost the economy, but an increase in spending on consumer goods usually means an increase in debt and added financial challenges for individual consumers.

Besides the reluctance on the part of people to take out their credit cards when they go shopping, there is another factor at work in keeping the rate of consumer borrowing down. Banks and other lenders are making it more difficult for people to obtain credit. Even homebuyers are running into problems as mortgage lenders increase down payment requirements and tightening underwriting standards for borrowers.

One thing that has gone down in the most recent consumer debt statistics released by the government is the more than $1 trillion in student loan debt that people owe. The student debt figures have gone up 7 percent from the figures that were released one year ago. The good news surrounding student loans is that more consumers appear to be paying them on time.

For those consumers who are still in need of a fresh start, an attorney who practices in the area of bankruptcy law might be able to offer assistance. Preventing foreclosure and eliminating creditor harassment are just two of the benefits a bankruptcy might offer.

Source: Lexington Herald-Leader, “US household debt levels held back by cautious consumers,” Christopher S. Rugaber, May 12, 2015