Michigan residents expected to increase credit card debt in 2013

Despite forecasts for an improving economy, many people in the U.S. will find themselves in a much worse financial situation later this year than they expect. Although 2012 financial reports show a decrease in use of credit cards and overall debt loads for the average consumer, banks and other lenders are loosening their grip on their coffers, making it easier for people to borrow and use credit.

The number of filings for bankruptcy in Michigan were down last year, but not because borrowers were being more responsible. With a pending election and a sluggish economy, many people were tightening their belts and watching their spending. Banks were doing their part as well by reducing credit card limits and handing out fewer new credit cards.

However, all that has changed and, as consumer confidence soars, so do their credit card balances. Unfortunately, as spending goes up, so do debts loads and many Michigan residents find themselves struggling to pay their bills.

Are you overspending?

If you suspect you overspend, resolve now to take control of your spending in 2013 by using one or more of the following tips:

• Track how and on what you spend your money.
• Set up an automatic savings plan, even if it is only a few dollars each paycheck.
• Decide ahead of time how much you will spend during expensive times of the year, like Christmas.
• Create an emergency fund and use it only for true emergencies.
• Pay off your credit cards on a monthly basis.
• Do not presume that you will make more money next month or next year.

You probably cannot do all of the above at once, but try to take on each new goal every few months. By the end of 2013, you may find yourself in a much better financial situation.

However, life is what happens to you when you are making other plans. The loss of a job, an illness or an unexpected and costly incident can put you in a financial bind from which you cannot easily recover. Retired individuals and couples are especially at risk as inflation may be outpacing their fixed incomes.

Options for getting debt free

If circumstances or overspending have caught up to you and you find yourself missing payments or just not getting ahead, consider the options available to you. A Chapter 7 bankruptcy may eliminate much of your unsecured debt and a Chapter 13 bankruptcy allows you to reorganize your debts, reducing your monthly payments to an affordable level.

There are many options available for those needing a fresh start on their financial future such as debt consolidation or renegotiation. An experienced bankruptcy lawyer can help you decide if filing for bankruptcy is best for you.