Bankruptcy Law backfires on credit card issuers

MSN Money ^

[SDGOP]

An unprecedented spike in filings before reform took effect in fall 2005 is chewing into lenders' bottom lines, and the subsequent lull is showing signs of being short-lived. Bankruptcy attorneys say their caseloads are starting to pick up, and credit counseling agencies -- which provide now-mandatory sessions for consumers who want to file -- say they're seeing significantly more people than they initially predicted.

All this is raising questions about whether lenders will profit as much from the new bill as they hoped.Credit card interest out of control? Find a lower rate.

It wasn't supposed to be this way. The new law contains a “means test” that was supposed to steer higher-income filers toward repayment plans. Lenders expected a rush of consumers trying to beat the bankruptcy deadline, but nothing like the surge that actually occurred. More than 500,000 bankruptcy cases were filed in the two weeks before the law took effect, compared with a normal weekly volume of 30,000 to 35,000. So far this year more than 2 million cases have been filed, 49% more than the same period last year and eclipsing all previous records.

[PeteB570]

Ahhh, one note on transportation.

It comes in various sizes and the price range is very great.

People who make a lot less than me drive cars and SUVs that cost about 3 times what mine did. The ones that get me are the ones that have more money tied up in the driveway that in the house.

[wouldntbprudent]

Also, as discussed previously, the attitude frequently is, "I'm insured, it's not fair I have to pay any of this."

So a $12K medical bill, which is essentially a co-pay, leads to bankruptcy, while taking on a $12K consumer good debt is considering not only fine, but necessary!

[elbucko]

Half of Bankruptcy Due to Medical Bills -- U.S. Study

If the credit card companies were wise, they should start health insurance companies and work both sides of the street.

[A. Pole]

If the credit card companies were wise, they should start health insurance companies and work both sides of the street.

How do you know that don't? This could explain the exploding health care costs! :)

[A Ruckus of Dogs]

For one thing, the U.S. has more people living in remote, sparsely-populated areas than countries in Europe and advanced industrialized countries in Asia. This means Americans are more susceptible to death due to a lack of immediate emergency medical care in cases of motor vehicle accidents, medical emergencies, etc.

Maybe, but homicide rates also cut down on life expectancy. We've got a lot of violent crime in our cities.

[A Ruckus of Dogs]

People who make a lot less than me drive cars and SUVs that cost about 3 times what mine did

They could be leased.

[Protagoras]

They need to amend the law to retroactively make illegal all these deadbeats filing at the last minute.

Luckily, ex-post facto laws were judged improper by the founders.

[elbucko]

How do you know that [they] don't? [own health ins. co's.]

I don't, but I've never read an item in the financial news that Blue Cross is a subsidiary of Visa. In all honesty, I doubt that the MBA's at MasterCard have even thought of cross-pollinating their business this way.

As for health insurance, it really needs to be taken out of the for-profit, public company model and into the regulated-profit, monopoly, utility model. Like Con Ed. The genius of America has been that it has always been able to jump over socialism with the utility model for necessities. Health insurance is now as big a necessity as electricity, but it would be a disaster if it became socialized (single payer is the socialists euphemism).

The public employee union pension funds would be a good place to start selling a health insurance utility companies stock.

[JudgemAll]

That's too bad. But you do make sense: I guess people must see the commercial to buy whatever gay or prostituted glitter crap is being sold.

I don't think credit card companies will holler in commercial to say they'll use "women" and gays to prey on other men's pockets, but they sure are into diversity training and against saying Merry Christmas while their commercials specificaly targets all forms of lusty expanditures.

[Cacique]

the list you present is misleading for a variety of reasons.

First the population sample of most of the countries at the top of the list is rather small compared to that of the United States. Secondly, with the exception of Canada most have homogenous populations with a common diet and limited gene pool which may account for some of the factors of longevity. For example, if Sardinia was detached from Italy it would rank among the highest on the list.

The United States does not have a homogenous population, nor a common diet etc. plus the agregate average does not take regional differences into account nor class and ethnic differences.

In short the statistics are totally meaningless when it comes to healthecare. A truer gauge of the effectiveness of health care would be the life expectancy of those receiving US helthcare as opposed to those receiving none, or comparatively comparing our healthcare statistics to those of other countries.

[Xenalyte]

Okay, then, forget the commercials. How do credit card companies "promote feminism" and "promote the gay kit(s)ch lifestyle"?

[JudgemAll]

Neighbors' experience:

she spends too much, he says stop, she won't stop and says it's abuse to make her stop.

He finaly can't pay up cards, files for bankrupcy. She divorces and feminist judge approves her when the judge say the man should have paid the cards and not filed, that he is a crook and a potential abuser and cannot have house nor kids.

Credit cards clap clap clap

---

As for gays, they all live well above their means, those that I know, extort money from other men to pay up bills and are all over the marketing and modeling in your face "expression" for products.... and they want gay marriages from which alimony and bills will have to be paid if one dares change lifestyle.

[Bella_Bru]

When airlines or other prominent businesses can file every other year with no apparent affect except screwing the shareholder and employees, who would think bankruptcies have negative connotations?

Those are corporations and they can do as they want and we should never insult them or suggest they be held accountable for themselves, remember?

< /sarcasm>

[BeHoldAPaleHorse]

"People who make a lot less than me drive cars and SUVs that cost about 3 times what mine did. The ones that get me are the ones that have more money tied up in the driveway that in the house."

I've seen a Ford F350 Dually Crew Cab, with a boat in tow...

...PARKED IN FRONT OF A F***ING SINGLE-WIDE TRAILER!

[Luke Skyfreeper]

Most of theses peoples lives are emergencies...they were close to the edge as is and something bad happened....they just can't get off the mat. I have spent many nites crunching numbers with these folks trying to square a circle. I was amazed at the sacrifices they would try to make to keep themselves from filing BK.

Good to hear from someone who knows something about it.

I'll pipe up here and identify myself as someone who's filed bankruptcy in the not-so-so-distant past. Yes, I know that's almost like inviting all the @$$h0!es to come out of the woodwork and condemn me, but I'm not known for being too much less than frank, so let the jerkos flame away.

We spent many years doing charitable work overseas at a low level of income, out of a strong desire to do our part to help people and make the world a better place. Unfortunately all of our training and experience was in a technical field, which meant our knowledge and skills were totally out of date when we returned to the US after years of serving overseas.

In spite of years of low income, we had thousands of dollars of cash when we came back... (we've always lived very frugally) but employment opportunities were very limited, especially for someone who had been out of the field for a long time, so I attempted to start my own business. As hard as I tried, it was a disaster and we were already deep in debt before we pulled the plug and I managed, months later, to come up with a job.

That lasted less than a year (with most of our "extra" money going to try and pay down the debt) before I ended up unemployed again, and this time, there was no job. Second interviews, companies that seemed to like me very well, but never an offer.

After a couple of years of things like manual labor that just about nobody else would do, telemarketing for $10 an hour, unrelenting disappointment on the "real" job application front, daily harassment from creditors and still desperately searching for a way out, I ended up desperately depressed. I considered suicide before I considered bankruptcy.

In the end I dragged myself out of severe, hopeless depression (that alone took almost a year) and started my own business again. After the first experience, that was the LAST thing on earth I wanted to even attempt, but with no other options that could support my large family I gave it a shot, as it seemed the only way I would ever work in my field again, or make more than about $10 an hour doing work I could hardly stomach going to.

I'm still only making about $20,000 a year to support a large family, and we barely scrape by, but things are better than they've been for a long time. I can't say enough that's good about the bankruptcy process - it gave me hope that I could have a life again.

[Final Authority]

WRT 127, are you implying that we, the people of the Free Republic of the United States, require more socialism and socialist programs to keep pace with the rest of the world?

Or, as I suspect, are you are offering some statistics without a clue as to what they mean (that is, you haven't any understanding of the nuances of the facts) or the implications thereof?

[Danette]

bumping to read later.

[montag813]

An unprecedented spike in filings before reform took effect in fall 2005 is chewing into lenders' bottom lines

Good. I hope they themselves go bankrupt. The credit card indusry makes the tobacco industry look like the Salvation Army. Evil incarnate.

[montag813]

When in doubt file and get on the docket. It's like a three day boxing day sale. Guaranteed to generate business.

What does that mean?