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Consumer spending tightening, concerning some economists

Workers in Ohio are likely aware that the payroll tax holiday expired, and many paychecks were smaller in January than what consumers took home in December. Nationwide, gas prices have been relatively high. Economists say that the combination of those two factors and worries about a potential logjam on economic issues in Congress, are all adding up to a drop in spending.

If Congress cannot agree to a deal, automatic budget cuts are set to take effect next Friday. Many consumers feel that that could delay federal tax returns for those who overpaid the government. Often, financially distressed consumers may wait to receive a tax refund to use the money to file for bankruptcy.

Commentators say that roughly two-thirds of all workers expect to receive a tax refund this year. Roughly 44 percent of American consumers plan to hang onto the cash. Slightly more than 37 percent of consumers say that they intend to use their tax refunds to pay down outstanding debt.

Many indicators suggest that the economy is recovering, slowly. But the recent changes in paychecks and costs at the pump are slowing consumer spending nationwide, according to economists.

We all hope that the economy can come back sufficiently to live comfortably. Many consumers, however, continue to struggle from paycheck to paycheck due to outstanding credit card balances or medical debt. As the recovery continues to remain sluggish, some Cincinnati residents may be considering seeking debt relief.

There are a variety of ways to accomplish debt relief, but no single idea is a one size fits all panacea. It is important for people who are struggling financially to learn how various forms of debt relief work.

A bankruptcy lawyer can explain he different forms of bankruptcy protection offered under the Bankruptcy Code. Because the various chapters of bankruptcy apply differently to an individual asset and debt structure, what pros and cons exist in an individual situation may be dependent on the individual financial structure in the household.

Source: CNN Money, "Crunched consumers are cutting back," Melanie Hicken, Feb. 21, 2013

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