Credit card companies increase rates as holiday season approaches

If only it were just the Christmas tree...

Just in case you thought things weren’t bad enough, the credit card companies are stepping up to make sure you know that things can get worse according to a recent article in the Denver Post.

As holiday season approaches, credit card companies have been raising rates (sometimes double or event triple the previous rate), increasing the monthly minimum payment and lowering credit limits on unsuspecting consumers.  In some instances, credit card companies have sent notices of rate increases using mail designed to look like junk mail to increase the likelihood that consumers won’t notice.

Ironically, this is happening right now because of the Obama Administration’s attempt to curb the abusive practices of credit card companies.  In February 2010, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (or, “Credit CARD” Act for short) will go into effect.  If there was any debate about the need for such a law, the blatant actions of the credit card companies to take full advantage of the remaining window of opportunity makes very clear that the credit card industry does in fact need to be reigned in and that increased protections for consumers are very much in order.

If you’re struggling with too much credit card debt in New York and are in need of legal advice about New York bankruptcy and non-bankruptcy options, please feel free to contact me for a free initial consultation.  I’ve been helping individuals fight back against unscrupulous credit card companies for years, and I’ll make sure you get the benefits to which you’re entitled under the law.

Contact

EMAIL Bruce Weiner
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(718) 855-6840 (Local)
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Go to www.nybankruptcy.net to learn more about Rosenberg Musso & Weiner LLP and/or to set up a free consultation.

Should I max out my credit cards before I file for bankruptcy?

Q:  Since all of my debts will be discharged after I file for bankruptcy, should I go ahead and max out my credit cards before I file for bankruptcy in New York?

A:  NO.  DO NOT RUN UP BIG CREDIT CARD BILLS BEFORE YOU FILE FOR BANKRUPTCY IN NEW YORK.

If the bankruptcy judge believes you incurred debts in bad faith, odds are you will be required to pay back those debts.  It’s also possible that your case will simply be dismissed.  Credit cards companies are experienced with these situations and know how to challenge large, non-typical purchases and charges, including cash advances.  In the end, you’ll only make your life more difficult, more complicated and more expensive.

Non-bank lenders and the Consumer Financial Protection Agency

We hear a lot of terms that refer to players in the money lending industry.  Banks, mortgage lenders, credit card companies, subprime lenders, mortgage brokers, etc.

One distinction we don’t hear a lot about, though, is the one between banks and non-bank lenders.  The difference is that banks are subject to much more regulation and oversight, while non-bank lenders are not subject to the same kinds of restrictions.

A recent article (“Real Change:  Turning Up the Heat on Non-Bank Lenders“) by Harvard bankruptcy law professor Elizabeth Warren, who is currently serving as the Chair of the Congressional Oversight Panel created to oversee the banking bailouts, draws attention to the importance of making sure these non-bank lenders are not able to scam consumers by working in the gaps between federal and state regulations.

The issue has arisen in response to President Obama’s recent proposal to create a new Consumer Financial Protection Agency, which is an attempt to right many of the wrongs that led to the current economic crisis we’re facing.  And as Professor Warren points out, the big business lobby is doing everything it can to squash the creation of the CFPA before it can get out of the gate.

That would be a shame as American consumers are in more need of financial protections than ever right now.  Consumers are vulnerable enough as it is in the current economy.  Easy pickings for unscrupulous non-bank lenders…unless we make the effort to stop them.

Stay tuned to this issue as its evolution will likely have an impact on bankruptcy filing rates in the future, in New York and across the U.S.

Read more at: http://www.huffingtonpost.com/elizabeth-warren/real-change-turning-up-th_b_276887.html

Can I rebuild my credit after bankruptcy in New York?

Yes, you can rebuild your credit within a few years if you’re careful about your finances and pay your bills on time after you’re done with your bankruptcy case.

A lot of people worry about their credit history when they consider filing for bankruptcy in New York.  It’s a legitimate concern and a healthy impulse to raise the question.

However, in the grand scheme, if you’re behind on a lot of bills and unlikely to be able to pay them off over time, then your credit history is likely to suffer regardless of which path you take.  Sure, bankruptcy affects your credit score.  But bear in mind repossessions, foreclosures and collection lawsuits become part of your credit history and remain there for as long as a bankruptcy does (i.e., 10 years).

If you’re drowning under a mountain of debt, then a more logical way to think about it is that filing for bankruptcy is the first step you take towards rebuilding your credit history.  When you file for bankruptcy, the case ends with a discharge.  The discharge gives you a clean slate and the breathing space to get your finances in order.  And regaining control of your finances is the path towards rebuilding your credit score.

Additionally, after your discharge you are suddenly very attractive to certain lenders.  Why?  Because you suddenly have little or no debt.  As a result, most debtors receive new credit card offers after coming out of bankruptcy.  Though it’s important to note that the credit cards generally have stricter standards and more limits than the types of credit cards you might have had previously.  Still, if you need a credit card, and you use it responsibly, then you’ll build up your credit score gradually over time.  In fact, using a credit card and making payments on time over a period of time actually improves your credit score.

If you have more questions about credit cards and credit card debt, or if you’re considering filing for bankruptcy in New York to deal with credit card debt or any other debt, please feel free to contact me for a free initial consultation.  I’ll be happy to answer all of your questions and figure out the best strategy for you to move forward with your financial life.

New credit card laws and what they mean for you

The rules for credit cards will soon change.  The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 (such a clever acronym) is set and ready to go into effect in 2010.

How will this affect you?  Well, according to an article in today’s Washington Post, the main things are that it will:

• Lead to the return of annual fees on credit cards.
• Lead to fewer incentive programs such as frequent flyer miles.
• Make things tougher for the poor credit card companies like Capital One, which “relies more than most other issuers on late fees for revenue.”  (The article also notes that “the legislation could help Capital One by placing new limits on “teaser rates” and deals on balance transfers, which are used more widely by Capital One’s competitors.”)

While I don’t think we need to lose any sleep worrying about whether the credit card companies have enough money, the return of annual fees is of some concern and something to factor into your budget in the future.