Got credit card debt?
Need a bailout?
Well, you may be getting one. According to a USA Today article:
“This year, delinquent credit card accounts hit a six-year high of 4.9%. Meanwhile, charge-offs – when banks give up on collecting debt – have been rising for about two years, hitting 5.47% in the second quarter, the latest data available, according to the Federal Reserve. Credit card and mortgage losses have dragged down banks’ earnings.”
To avoid the fallout from not being able to collect from bankrupt consumers, the banks are proposing to forgive up to 40% of credit card debt owed by financially strapped consumers near bankruptcy. Those consumers would then have up to 5 years to pay the remaining 60% – interest free!
The banks are also looking to have a rule repealed that requires them to file losses on the forgiven debt in the same fiscal year.
The banks get to avoid further losses, and consumers who are nearing bankruptcy and have high debt get a size able chunk off their shoulders. This seems like a win-win! Yes, I know it rewards irresponsible borrowing and lending, but we’ve pretty much past the point of being rational in such regards (sigh)…
I am really against the bailouts for all these people and businesses who have managed their money poorly over the years and are not getting off with no repercussion.
Well David the collection agency spoke person Why should the taxpayer bailout the banks that managed their money poorly? I do believe the banks were the irresponsible ones who sold off mortgage backed securites that they knew were ng.You dont loan money to people who cannot verify their income.Go to the democratic underground.com and read steven lesers journal.Also go to seeking alpha (Banks want another hidden bailout)by Patrick Watson
I agree but also want to throw a wrench into the gears because this became personal for me. I make a good living and my wife did as well. We lived beneath our means and were able to give to numerous charities and community. However, the company my wife was working for mismanaged their finances and now she is out of a job. We didn’t think that was a big deal initially, but as the months passed and the number of jobs shrank, so did the hopes of finding a job to replace the job she lost. Having to adjust to a single income took time and in the interim we made numerous sacrifices to leave within my paycheck but still managed to max out our credit cards before we figured out how everything would fit. No we’re trying to recover on a single income. We live like pauper’s in a castle that the king abandoned. It’s been a year and my housing edition in the country has slowly turned into a ghost town. Many of the houses are literally abandoned. They purposely gave them up to foreclosure driving the value of my house to less than half of what it was last year alone. So, now I can’t sell and move into a smaller home to adjust to our new level of income. That leaves only something like this credit card bailout or similar assistance to get us back on our feet again.
I wish things were different but this is a whole new ballgame. There are new rules and we have to adjust somehow.
Wow, lots of typos in that last post.
We’re trying to live, not leave, on a single income.
NOW we’re trying to recover on a single income.
There are other badly constructed sentences and then the “victim” statement.
The truth is I’m embarrassed about looking for assistance but I don’t know how else to recover from this hole. We really want to move out of state, to a smaller home in the country and live off the land. We don’t mind living a simple life with a windmill for power and beating the bugs off our food supply for months before we can eat it. In fact, we’d prefer that right now. Our grandparents lived that way, and we figure we can too.
The fact is we need help to get there. Without some sort of assistance to get us out of debt and out of this house, we’ll never make it to that simpler life.
I can see alot of people are in the dark about what is going on. The banks who are the credit card companies are taking the taxpayers money so they can stay in business. Then they raise the interest rates to loan shark levels.They are doing this to the very same people that saved them from bankruptcy.The worst part is the government is letting them.
Dale,
Don’t worry about the typos… I’ve seen much worse (and made a few myself!)
Have you tried negotiating with your credit card company(s)? If you honestly can’t make your payments, then you may be able to get them to give you a break on the rate, or get them to forgive a portion of the amount.
Then you should try and get a 0% or some other low intro rate on balance transfers, transfer your remaining debt (or as much as you can) and pay it off before the interest resets.
I don’t know exactly how dire your cash flow situation is, but my wife and I paid off our credit card balance after transferring to a 0% intro rate card. It saved us thousands in interest.
Best of luck to you, and I hope things start to turn around soon for all our sakes…
Boy can I relate to living a simple life with fewer “things”.
First step anyone in deep debt should take is obvious. Create a detailed and HONEST budget of what you owe and what you earn. What is your financial standing and cash flow.
If you have some postive cash flow after paying min balance due on your debts then you can take the Dave Ramsey “pay down” approach.
You basically pay minimum due on all debts, accept for the smallest debt, not the smallest interest rate, the smallest debt amount. When that debt is paid you target next smallest debt. You take all your positive cash flow and apply it to that debt. You do this for each debt, including your car and your home. Pay them all off.
In conjunction with this, yes, call and hound those creditors and ask for better interest rates and see if they have a debt relief option.
Problem worse than that? You can afford your minimum payments, but the interest rates are killing you, you’ll never be out of debt in the next 20 years and the creditors will not budge? Contact a credit counseling company. or learn more about them at creditcounseling101.com
Problem even worse? You have little income, cant afford your payments, you’re late, your credit cards are closed in default and creditors are calling. You have over $15,000 in credit card or medical debt? You could seek the help of a Credit Card Bailout program. See the official CreditCardBailout.com website. This is a negotiation process with your creditors that can significantly reduce your debts, IF your financial hardship qualifies.
No income, high debts, and your home is in danger? Contact a bankruptcy attorney in your state to help sort out your options.
As always, check with your local chamber of commerce, Attorney General and BBB to see if the company you hiring to help is licensed in your state. Best – Jacob.
This is off from credit card bailout.
I think if there is around say 200 million US citizens 18 years old and older they should give all legal adults one million dollars each with the stipulation that everyone MUST buy a new GM automobile with-in 90 days and MUST payoff their home loans off with-in 90 days or forfeit the million dollars . Seem like that would have got GM and Freddie Mac out of the hole along with every adult American not to mention being cheaper.
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