Struggling with debt? There are solutions

The Federal Reserve recently released numbers for December, which showed an increase in student loan and auto loan borrowing. This increase coincided with a decrease in credit card debt, which points to the fact that many Americans are continuing to financially struggle and not making as many purchases as they once did when the economy was stronger.

According to the Federal Reserve, consumer borrowing as a whole -- between credit cards, student loans and auto loans -- rose by $14.6 billion in December. This brings the grand total of consumer borrowing in these categories to $2.78 trillion.

In looking at the breakdown, the biggest gains were seen in the category comprised of auto and student loans, with student loans making up the majority of that increase. This is due to the fact that with the Great Recession and high unemployment rates, many decided to go back to school in the hopes of having a competitive edge in the tight job market.

In terms of credit cards, credit card debt has declined by 17 percent since 2008. This December, credit card debt fell by $3.6 billion to approximately $850 billion. It is predicted this trend will continue on in 2013, which will in turn slow economic growth.

Aside from high unemployment in the U.S., many also reduced their spending due to an increase in payroll taxes. Looking at how this will affect most Americans, those making roughly $50,000 a year will have roughly $1,000 less in spending money this year. For a household with two workers who are earning decent incomes, they will have roughly $4,500 less in spending money.

Looking to the future, what these statistics mean is that people are still struggling. And while many might have taken out student loans in the hopes of getting a better education to secure a job, unemployment is still high. This means many might end up owing thousands for an education, but still unable to find jobs.

Of course, any kind of debt is stressful. Whether it is student loan debt, unpaid medical bills or credit card debt, all have an impact on a person's financial and emotional well-being. However, keep in mind that there are often debt relief solutions that are available. An attorney with experience handling debt relief in Minnesota can help explain those options.

Source: The Associated Press, "US Consumer Debt up in Dec. on Student, Auto Loans," Martin Crutsinger, Feb. 8, 2013

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