Credit Card Debt Next Crisis?

The sub-prime mortgage crisis has the attention of many, but credit card defaults are rising, up 30%.

A study of the new bankruptcy law accurately reports that the new law has doubled the cost to consumers to file, whether Chapter 7 or Chapter 13.

The article reporting the study says the credit lobby got what they wanted, by doubling the cost, it takes longer for consumers to be able to actually file a case.     This delay can only benefit creditors, who can continue garnishing or otherwise harassing people into making more payments to them.

Although the author believes credit card debt is the main reason people file bankruptcy, she believes the law has swung too far in favor of the creditor side.

Credit card companies have only increased their offers to consumers already in trouble with debt in the two years since the new bankruptcy laws became effective.

Why would anyone be surprised that default rates have increased?

Such increases in defaults are uniformly followed by an increase in bankruptcy filings

As always, my advice, do not borrow more than you can afford to repay.  And, do not try to borrow your way out of debt.

If you are using cash advances from some cards to make the minimum payments on other cards, sit back, figure out your actual monthly income and expenses.

If the expenses exceed the income, contact an experienced attorney to review your choices.