If you’re like many beleaguered and over-budgeted Americans, you grew weary and wary of credit card debt during the throes of the Great Recession.
The Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act) was supposed to address the fact that you’ve been “paying” with plastic both literally and metaphorically ways for years, shielding average Americans from unexpected and massive changes to their credit card terms—terms that had previously led directly to financial hardship for an overwhelming amount of our nation’s families.
Fast Forward to 2011 when new legislation is actually worsening many of the gains from the Credit CARD Act, by tightening federal regulations on debit card usage and causing banks to push their credit card offers to supplement lost debit income. According to The Huffington Post, “Banks have spent the past year pushing credit on shoppers through aggressive advertising, low-promotional rates and 0 percent offers, leaving no website, mailbox or television commercial slot untouched with promotions to get shoppers charging. The new efforts come as a reaction to the Durbin amendment, part of the larger Dodd-Frank financial reform legislation, which was enacted on October 1. The regulation limits the amount a bank can extract each time a customer swipes a debit card to around 21 cents. Credit card swipe fees, meanwhile, are essentially a Wild West for bank revenue: Companies and issuers can charge between 2 and 4 percent per credit transaction, with rewards cards typically getting an even higher rate. Where a $100 debit card purchase adds up to pennies on the dollar in swipe fees for a financial institution, a credit card swipe might send a $2.50 chunk of change to issuers.”
These nice fees for banks come at a substantial cost for consumer. The more shoppers the banking industry can get hooked back onto credit cards, the more easily it can earn back the money that has dried up from other sources, like debit-card usage fees and overdrafts.
So, while you did your best to avoid living beyond your means, try as you might, these types of aggressive tactics can mean you start to accumulate that consumer debt all over again. And the proof is in the pudding: a good number of bankruptcy bound individuals—even in an era of home-made foreclosure filings and mounting medical bills—find credit card debt to blame for their insolvency even in this era of savings and scrounging.
By dumping debt through bankruptcy, you can avoid the harassment of creditors and debt collectors. Bankruptcy’s automatic stay is a powerful court order that kicks in as soon as you file your precious bankruptcy papers. In addition to pausing any pending lawsuits, such as foreclosure proceedings, the automatic stay can put a stop to all forms of collection by creditors, including, repossessions, garnishment, lawsuits, and harassing phone calls. Ultimately, if creditors want to take action against you or your property, they have to get permission from the courts.
If you too have been affected by the economy and are wondering how to reduce debt and get back on track, knowing a qualified bankruptcy attorney can also help you to conquer your creditors and face your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond our own “Great Recession.” The bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.