Credit card bailout coming soon
I don’t know the exact details of this bailout but what it looks like is anyone on the verge of bankruptcy will be allowed to have their credit card balances slashed by 40% and allowed to repay the remaining 60% debt at 0% or some other low rate over a few years.
Lynchburg, VA – Many of us would love to pay off our credit cards. But consumer data shows more and more people can’t. For them, bankruptcy seems inevitable. But help could soon be on the way. Banks and consumer groups want to erase much of that debt. They think it would help everyone. The consumers would get a break. The banks would get their money back and it wouldn’t cost us taxpayers a thing. At the grocery store, at the gas pump, credit cards aren’t just for emergencies anymore. More people are using them just to get by. Margaret – “Is it a struggle to get those bills paid every month?” Emory Hollins, Credit Card User – “It is, every month.” Now more consumers, feel there’s no way out. Hollins – “I don’t know how to get out of the cycle, I need help.” Help may be on the way for people like Emory Hollins who maybe close to declaring bankruptcy. The Financial Services Roundtable, made up of consumer advocates and banks, is asking the government to allow banks to forgive up to 40% of credit card debt for people who are on the road to bankruptcy. The remaining 60% would be paid back over five years at 0% interest. Helping people stay out of bankruptcy court and helping banks out too. Joan Foster, Alliance Credit Counseling – “If you go bankrupt, that’s 100% of your debt that you aren’t going to get paid back, in this proposal they would be paid back.” Michele Fitzgerald, Lynchburg – “That would help a lot of people, including me.” Participants would also have to be enrolled in credit counseling. Foster – “This would teach some responsibility.” But others worry it may do the opposite. Reginald Goodman, Lynchburg – “You don’t know what might happen. It’s hard to tell. People take advantage of this type of thing.” And they do want to test this program out. If the government approves it, 50,000 people will participate. They’ll be followed for a year and a half to see how it goes.
There are some other articles about this circulating on the Internet. I do think this will probably happen. I think many people who have a ton of credit card debt will want to do this, but I don’t know how the credit card companies will feel about this. At this point, I guess they would rather get something versus nothing if a consumer files BK.
Another factor to consider is whether these modifications will impact the credit card holders credit scores in a negative or positive way. With CCCs programs, not all creditors participate and will continue to report your loan or credit card delinquent even though they accept the small payments made from them on your behalf. This will be interesting when it reaches Congress. I think this program will definitely affect every one’s view on credit in general if and when they formalize it. The way things look right now I think it is only a matter of time when they put the plan in action.
Google Search
9 Comments
Subscribe to the Comments
Why do we continue to bail out anyone that is unable to live within their means? Irresponsible spending should not be rewarded. I certainly hope they will knock off 40% of my debt also.
I felt the same way and I worked 2 jobs and paid extra on my cards. They just kept sending them to me. Then the Real Estate dropped like a rock and so did my income. Now I have to check and see if I have the money on my cards to get the gas to get to work. I have tried the Credit Counseling and I had good credit and so my interest rates are low and so it would not help much. The debt management is a scary thing to just stop paying until the management company has collected enough to make an offer to the credit card company’s. All the while the credit card companies are calling and can take you to court. The one that you owe the most would be the last to be contacted so it could be 3 years. I could not get a loan and my home is upside down by $50K. So I only have two options Bankruptcy or ….
Most of my cards have balances. All but one, are not being used. I have not missed pmts and usually pay more than required. The interest rates keep going up and I can’t get them paid off. Something to control the rates would be beneficial even if they don’t do anything else.
The problem isn’t the credit card companies, it’s the government allowing the credit card companies to charge whatever interest rate they want. BTW, the government gets a huge kickback from the credit card companies, so they want these ridiculous interest rates to continue!
I have had a credit card for over ten years
It’s the only one I have ever had or wanted
I have never missed a payment or been late except once or twice by a day or two
Lately it has only been the minimum plus a little here and there
Shortly after the bank that owns my card got their first installment of the bailout money they raised my rate by 15% and cut my limit because they didn’t like the store I chose to deal with
My interest now is almost equal to the minimum payment I had before
I’m tempted to stop paying that bill and apply the money towards those that have shown that they appreciate my business
I don’t want any handout form the government but it would be nice if they would simply enforce the usery laws already on the books
The banks that get bailed out are the credit card companies. Without the bailout they would not be in business any more.Who bailed them out? The very same people who have these credit cards the taxpayer.So why should these banks get bailed out but not the people who have these cards. The banks are more to blame than anyone.
It’s the American way – Buy today and pay tomorrow. Sometimes tomorrow leads to a job loss with the inabilty to pay for that debt….OR in my case, I experieneced a job loss and utilized CC to survive with just the basics.
Let me paint a financial picture for you of the average American
household.
The average American household (let’s call them the Smiths)
carries $9,000 in credit card debt at a rate of 19%. Let’s say
the Smiths don’t make any more charges to their card (yeah,
right) and make minimum payments of 2% of their balance until
it is paid in full.
IT WOULD TAKE THE SMITHS 81 YEARS AND 1 MONTH TO PAY OFF THE
ACCOUNT AND THEY WOULD END UP PAYING $41,796 FOR THE PRIVILAGE
OF CHARGING $9,000.
This means that the groceries, gas, clothes, and other items
that were purchased with the Smith’s credit card translates to
them paying 464% more than someone paying cash for those same
items.
Next time you purchase a tank full of gas think about that.
My tank costs about $50 to fill using my debit card. If this
tank of gas was purchased on the Smith’s credit card, it would
effectively cost them $232!
Furthermore::::::::
When you entered into a loan or credit contract, you signed a
note or contract promising to pay them back. This contract
supposedly qualified you to receive the money or credit. But did
they provide ‘full disclosure’ of all of the terms of this
agreement? Answer the following questions and decide for yourself
if the bank or credit card company was acting in ‘good faith,’
that you received ‘valuable consideration.’
Were you told that the Federal Reserve Policies and Procedures
and the Generally Accepted Accounting Principles (GAAP)
requirements imposed upon all Federally-insured (FDIC) banks in
Title 12 of the United States Code, section 1831, PROHIBIT them
from lending their own money from their own assets, or from other
depositors?
Well if they are not lending their own money, where did the money
come from??? Good question, a reasonable question, and one whose
answer you are going to find difficult to believe.
THEY MONETIZED YOUR SIGNED CONTRACT AND USED IT TO FUND YOUR LOAN.
The contract you signed (your promissory note) is literally
converted into a ‘negotiable instrument’ by the bank or credit
card company and becomes an asset on their accounting books.
Your signature on that note made it ‘money,’ according to the
Uniform Commercial Code (UCC), sections 1-201(24) and 3-104.
Were you told that your promissory note (money) would be taken,
recorded as an asset, and be sold for cash – without ‘valuable
consideration’ given to obtain your note? Did they give you a
deposit slip as a receipt for the money you gave them, just as a
bank would normally provide when you make a deposit to the bank?
Of course they didn’t.
They are creating money out of your signature, lending it back
to you AND charging you such high interests rates that it would
get your friend Joe – who actually has to lend his own money
- locked up.
If there is a credit card bailout coming; let it come quickly. I have been made my ‘debt beds’ and always paid them off until recently. Loss of my 29 years full time job to downsizing, the surging economy over the past years, diasters like Katrina, and unexpected addition to the family (first grandchild)just send things out of control financially. If they are going to implement a ‘financial bailout’ for the little joe nobodies like me. Bring it on. We deserve the same opportunities to get financial bailout as those extended to the
‘mega’ financial wizards, who are suppose to have the know how, ‘expertise’ in finances. I don’t expect a free pass. Just need money to consolidate my debt and have one payment that I can afford to make on a regular basis (low/no interest, reasonable months to paid it off). It is honest to take responsibility for bad judgement, no matter what caused it! I am willing to do that – we the working class are the ones who need help getting ourselves back on track financially. Not those ‘greed stricken’ goats of the financial and banking industry. Send the little guy/working class bailout package EMS!
I am one of those people who found themselves using their credit cards to survive when my hours were cut back and my husband lost his job. We were sure he would be back to work and we would be able to work all this out, but after 6 months things have just gotten worse. Pay the credit cards now or pay our mortgage and not loose our house. We didn’t think homeless was the answer. We just happen to get in the way of the speeding truck.
Leave a comment
Get a Trackback link