Posted on 12/28/2005 12:43:50 AM PST by 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.
(Excerpt) Read more at moneycentral.msn.com ...
I have little sympathy for credit card issuers. Their judgment is no better than those who do not handle credit well.
I had three different households in my extended family (that I know of) file for bankruptcy before the new law went into effect. My GF handles the Chapter 7 bankruptcies for a credit union, and she has been absolutely swamped since October. Things are pretty bad out there.
Canaries in the coal mine. Don't think it hasn't been noticed by Wall Street.
Their purpose is to make money. A lot of the credit card companies are sharks, so I agree with you about their judgment. Easy credit to the non-creditworthy is stuck on stupid.
Since I focus on the individual first and foremost, I place this blame squarely in the individual's lap. What's that saying? A fool and his money are soon parted. Every man has to pay. There are no exceptions.
That's a fact.
Worse even. They encourage over the top credit use. Heck, I could probably get a card for my dog.
Used to be credit was a privilege. You had to be responsible. Not any more.
If the credit industry issues cards to someone who maybe shouldn't have one, it's not like they have no liability whatsoever.
IMHO, they're not much diferent than Frankie and Guido.
Just that they won't break your legs (yet!!!).
OOPS, South Dakota should read Iowa. Iowa has no limit on usury!!! They could charge 100% monthly!!!
Issuers are idiots, you can say that again.
They promote feminism coz it makes her spend freely without hubby spanking her. They also promotes gay lifestyle kitch spending.
Result: bankrupcies and economic crash.
These bankers are stupid. They think they snooker people and not themselve when they invite Satan in the markets.
And to those merchants who promote theft and hate by banning Merry Christmas at their own expense, I say sarcasticaly:
HAPPY HOLIDAYS ALL!!!!!
What next? Blame fathers and "wife beaters" who won't pay her bills? (sarcasm off)
Yes, and PC merchants and banks hating Jews and Christians who are about responsible spending does not help.
This is not a cost of their institutionalizing gays and feminists as equals, this is a cost of their self-institutionalization under such evils, the windfall of 60s revolution free sex globalization spending they all wished for.
Serves them right: like I said: HAPPY HOLIDAYS losers!
Here is an additional part of the scam I think. Issue credit cards. Most people pay. The minority that don't or are late are a double bonus for the CC Companies. They bump their rate to 25% or more. Now here is where it gets interesting. They should be able to deduct the moneies owed including interest as a bad deb't once they cannot pay. If this is correct they have a vast pool of money owed which they can as needed apply to offset real profits when they choose to. Give some kids (young people) a thousand dollar card and gain a many thousand dollar deduction. Then of course you can wreck the kids credit and charge outrageous rates for many years while they "rehab their credit".
Can some Accountant or CPA comment am I right about this or close?
Wm
Usury should still be a crime.
They need to amend the law to retroactively make illegal all these deadbeats filing at the last minute.
i have zero sympathy for the issuers. it is a fact of life that a portion of the human population, here or wherever, is financially incompetent, and the banks know it better than anyone - I imagine this segment is the most profitable for them as far as interest carry goes.
Unless you have already been bankrupt, it is hard to get REFUSED for a credit card of some sort. Why is anyone sympathetic to that part of the industry?
Carrying credit card debt more than a month is the renting of spent money. How that makes sense to anyone is beyond me.
Yeah, it blows the mind to think there are that many people who (some, not all) run up huge debts and then dump them without a second thought.
Sure, there are legitimate times for bankruptcy, but 500,000 filings in a few weeks?
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