Debt and Bankruptcy - Credit card payments almost doubled

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The bankruptcy bill is about to be passed. You might already have heard about people making a mad rush to the attorney's office to file for bankruptcy. Infact many attorney's have stopped accepting further cases for bankruptcy. The bill has made credit counseling mandatory for people who consider filing for bankruptcy. Does it mean it is bad to go in for credit counseling? Not at all. Infact credit counseling in general can help you manage your finances better in the forseeable future. You can work with a good credit counseling firm to knock off your debt rather than file bankruptcy. Also, bankruptcy is considered nasty on your credit file whereas credit counseling entries might not even show up on your credit file. It is best advised to ask credit related questions to your credit counselor who can give you tips and insight to credit counseling.



Consolidate Government Student Loans
One of the biggest burdens faced by today's students is the repayment of expensive student loans. In a day where room, board, tuition, and books can push college bills up past 20, 30, even 40 thousand dollars per year, many students are finding themselves in serious debt upon leaving college. Even with a good job lined up, you may find that you will be repaying your loans well after leaving school... Read debt consolidation article



Debt and Bankruptcy - Credit card payments almost doubled
As we move closer and closer to the final implementation of the Bankruptcy Reform Act, many US citizens are making a mad dash to their local attorney's office. Rightfully so, as the Bankruptcy Reform Act will institute many changes that will ultimately make the declaration of bankruptcy a much more difficult task. But as you ponder the notion of a flood of bankruptcy filings, also realize that many of the major credit card issuers in the country are making changes to their guidelines that will cause monthly payments to go up and in many cases, almost double.

For years minimum payments have been set at roughly 2% - 2.5% of a persons total debt. So if you owed $10,000 you were paying roughly $200 per month. Now with guidelines changing a person could be required to pay 4% or more each month towards their credit card debt. Using the same example that would mean that the same $10,000 debt would require a $400 payment each month.

Although it is not an astronomical change, for those people who are living minimum payment to minimum payment this could be a crippling blow to their wallets. Another thing to consider is that most people are unaware of this upcoming change, meaning that they may or may not be able to make that payment on time. As we all know, if you don't pay on time, you will pay the fine.

Realize as well, that being charged a late fee is almost always coupled with an interest rate hike. This 1-2 punch from credit card issuers has an eerie timing about it. The government is going to make it more difficult for people to declare bankruptcy, and the banks are making changes that might cause more people need bankruptcy. It isn't difficult to see how these two changes together can, and most likely will, have a dramatic impact on the rest of the US and our commerce. No matter what the outcome proves to be, it is quite apparent that timing is everything.

For more information please visit: solveyourcreditproblems.com

A Florida native with a bumpy financial past, turned financial education guru and advocate for the masses.

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How to avoid shady debt consolidation or debt management companies

Unfortunately, not all debt consolidation companies are legitimate. To avoid the shady companies, educate yourself on the debt consolidation process and watch out for these warning signs.

Quote Unusually Low Monthly Payments

A debt consolidation company works with creditors to lower your interest rates. Creditors have predetermined rates that they will lower to, so every debt consolidation program will get you the same rates. But since 2004, creditors no longer accept reduced minimum monthly payments.

Companies who quote unusually low monthly payments are probably giving you a low figure, which they will raise once you are in the program. Instead of comparing monthly payments, request information on their fees.

Demand All Debts Be Included

Companies who demand that all your debts be included in the debt consolidation don't have your best interests in mind. Some loans, such as credit union loans, are ineligible for lower interest rates. And other types of credit, like student loans, may already have a low interest rate.

However, by including all your bills in the monthly payment, the company can charge you a higher fee for handling more accounts. Before you enter a program, decide which accounts you want to consolidate for lower rates.

Charge High Upfront Fees

The most common scam is to charge high upfront fees, up to thousands of dollars, for services. Sometimes companies will promise to refund fees on completion of the program, but few clients actually complete the program.

Legitimate non-profit companies charge a flat monthly fee for each account handled. They are usually subsidized by financing companies. For profit companies will charge a competitive fee along with a flat monthly charge.

Offer Debt Settlement And Other Services

Be suspicious of those offering other services besides debt consolidation. Debt settlement, credit repair, and other programs are often just scams to take your money.

If you do need to make a debt settlement, you can save yourself money by doing this yourself. You may also find that declaring bankruptcy would be a better financial choice.

Request Account Numbers First

Be highly suspicious of any company that requests your account numbers, social security number, or other personal information before providing a quote. By providing this information, you open yourself up to identify theft.

To receive an accurate quote, simply provide creditors' names, balances, and interest rates.

To view our list of recommended debt management and debt consolidation companies online, visit this page: Recommended Debt Consolidation & Debt Management Companies Online.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.


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Debt and Bankruptcy - Credit card payments almost doubled
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