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Our blog post earlier this week discussed that many Florida residents choose to file bankruptcy for fear of losing their homes. Many individuals are able to keep their homes after bankruptcy while also consolidating other debts or liquidating other assets. But fear of foreclosure is not the only reason why some choose to file for bankruptcy protection. Florida consumers choose to file bankruptcy for the main reason that they simply cannot afford to pay off their debts. Often, credit card debt is a factor Florida consumers consider when deciding to file for Chapter 7 or Chapter 13.

The Florida Times-Union recently published an article that discusses how several Florida cities ranked among the nation’s top 25 cities for having a high average of credit card debt. According to Experian Information Solutions Inc., the national average of consumer credit card debt is $4,200. However, several Florida cities show that consumers are carrying more than the national average in credit card debt.

According to the report, Jacksonville consumers ranked the second highest for credit card debt. On average, consumers carried $5,115 on their credit cards at the end of 2010. Several other Florida cities ranked among the nation’s top 25 including:

  • Tallahassee with an average of $4,605
  • Miami with an average of $4,555
  • Orlando with an average of $4,525

Although the increase in credit card debt may suggest that consumers feel more confident about spending, it also suggests that consumers are relying more on their credit cards to make ends meet. Experian noted that while Florida consumers are carrying more credit card debt, their credit scores are also plummeting. Consumers may have fewer credit cards, but they are carrying higher balances on open cards. Typically, consumers do not want to carry more than 30 percent of their available credit. Once they start carrying more than 30 percent of what their line of credit is, their scores decrease. Low credit scores can make it difficult to get other loans, credit cards or mortgages in the future.

Individuals who are struggling with credit card debt may want to consult a bankruptcy attorney to see if they can find a long-term solution to their financial problems.

Source

The Florida Times-Union: “Jacksonville No. 2 when it comes to credit card debt ratio,” Kevin Turner, 2 Mar. 2011