The Wisconsin Journal Sentinel reported this week that the number of lawsuits against consumers in Wisconsin for non payment of credit card balances has taken a sharp jump since 2007.
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Throughout the state, the number of lawsuits above $5,000 involving credit card debt is on track to increase by 16 percent. Waukesha is one county hit hardest by the lawsuits with an increase of 44% versus a year ago. According to the paper, in one week alone, 38 consumers were individually sued for an average of $12,306 in credit card debt. This is around 20% higher than the national average.
Like other parts of the country, the major factors leading to the inability to make payment on credit card debts are declining wages, increasing unemployment and rises in living costs such as energy and food. Due to tighter lending standards, people are also less likely to be able to tap into the equity of their homes to cover short-term cash needs.
Consumers are likely to continue to tap into multiple credit cards to stay afloat. This is likely to become a growing trend among states in the coming months as well as into 2009.