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Many Americans seeking financial fresh start in stumbling economy

It's no secret that the American economy has been struggling in recent years. What may be surprising to California residents is that over the past year Americans have cut their credit card debts quite significantly. In an age when one would think bankruptcy would be inevitable for many people, it is surprising to discover that Americans have actually been able to reduce their credit card debt. There's a dark cloud to that silver lining, however.

The average credit card debt across the country has fallen 11 percent this year. That is following a drop of 10 percent in 2010, according to a company that monitors credit card usage. In California, credit card debt has fallen by 13 percent from October 2010 through October 2011.

The onset of the holiday season is likely to have an inverse effect on diminishing credit card debt. People tend to spend beyond their means during this time of the year. Because of that, credit card debt is typically at its highest in January when the bills start rolling in. However, the recent overall decline in credit card debt is indicative of a more cautious attitude toward overspending, so the hit in January may not be as hard in 2012.

So what's the bad news? As an after-effect of the stumbling economy, more Americans are struggling with the reality of having a lower credit score. Between October 2010 and October 2011, the national average credit score dropped from 666 to 661. That may seem like a small dip, but consider this: most private lenders will not issue a mortgage to a person with a score lower than 660. The best position would be to have a score ranging from 740 to 850, and at 680 California has the highest average score of any state, though that has still a dip from its 684 average from a year ago.

But there are many families who are still swimming in credit card debt and are not sure of which way to turn for assistance. There is no shame in wanting to resolve outstanding financial issues that have spiraled out of control. Bankruptcy protection specifically envisions these problems and offers a lawful and effective means to conquer nagging debt and stop creditor harassment in its tracks. The result is likely to be a fresh beginning that provides for a return to financial stability.

Source: signonsandiego.com, "Credit card debt drops, as do credit scores," Dean Calbreath, Nov. 16, 2011

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