Alternatives to Bankruptcy offers the following article about credit card debt and the reality of what can happen if you do not pay your credit cards. Some consumers find themselves so overwhelmed with debt and simply cannot find a way to make the variety of payments.
If you have more questions, call a bankruptcy attorney. They will help you understand what can happen from a legal standpoint. Also, you can ask a trusted financial planner or financial adviser for more information.
Are you drowning in credit card debt? Do you feel helpless? Find out exactly what happens if you don’t pay your credit cards. Get the facts today!
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Alternatives to Bankruptcy presents the following article by Jim Cramer, posted on Mainstreet.com. The article highlights ways that you can fight back if and when your credit card company jacks up the rates on you. By being proactive with your credit card companies, you may be able to avoid bankruptcy.
By Jim Cramer, Mainstreet.com
I’ve heard a lot of feedback over my criticism of the U.S government’s handling of the financial crisis, especially the role that U.S. Treasury Secretary Tim Geithner has played in selling the $800 billion bailout that Congress enacted last week.
I like to think I’ve been tough, but fair. I even defended Geithner. Check out the current issue of New York Magazine. In it, I wrote: "The press, the pols, the Wall Streeters - they are all dumping their golden boy just when he’s figured out how to solve the most intractable set of financial woes since the ones that landed on FDR’s desk 76 years ago."
So while I get ticked off at the Treasury Dept. and at Washington on an increasingly regular basis, that doesn’t mean I’ve gone soft on Wall Street. Hardly. On the February 19 edition of Mad Money I hosted "Survivor: Wall Street" with my viewers. Basically, the game determines which sectors are going to survive this market, and which sectors will not and get thrown off the island. There was no shortage of castaways on the show, most notably the financial sector, which keeps coming up with new ways to screw up the economy.
Exhibit "A" is the credit card industry. You’d think that the chief recipients of all this TARP money would fall to its knees in gratitude over the taxpayer’s largesse. You’d think they’d refrain from instituting credibility-killing practices that make ex-Illinois Governor Rod Blagojevich look like a choirboy.
But they don’t. Instead, the credit card companies ramp up an already aggressive campaign to hike interest rates, clamp down on card limits, and generally treat historically loyal card customers like dirt. In a perfect world, Congress would begin charging credit card companies who have received bailout money with the same 30% interest that they want to charge us, and with the same penalty and rate-increase structures in pace.
Yet we don’t live in a fair world. Capital One (Stock Quote: COF), Citibank (Stock Quote: C), Wells Fargo (Stock Quote: WFC), Bank of America (Stock Quote: BAC) – all have been sending out those "important notice of a change in terms" letters that have been landing in American’ mail boxes. Now, if you pay even a day late, or have too big a balance in the eyes of the card companies, you’re being teed up for a huge hike in your annual percentage rate (APR). One notice I came across from Capital One said the cardholder’s default APR would rise "to a variable rate equal to 29.4%" as of 1/28/09. Of course, the cardholder didn’t even get the love letter from Capital One until February 20.
Of course, if you want to opt out of such a great deal, you can – but you have to pay off the entire balance of your card first.
Or how about this. J.P Morgan Chase (Stock Quote: JPM) has added a $10 "handling fee" to its cardholders – even as it, too, raises rates, hikes minimum payments, and cuts off credit from card-member accounts.
Talk about chutzpah.
So, what can we do to fight back? Let’s crack this case using some old-fashioned Cramerology.
First, don’t take these things personal. Credit card companies are raising rates and threatening to cancel cards for reasons beyond your control. Basically, they’re drowning in debt and are trying to generate as much as cash as they can, the good will of the customer be damned. Know that when you receive a letter from your card company saying they plan on raising your rates, they have to give a reason, and they have to give you time to opt out. Usually it’s something along the lines of the card company having to hike rates over late payments. If it’s something a little more offbeat, like your credit score has been lowered, and the card company now considers you to be a higher credit risk, they have to spell that out for you, too. So the best initial move, is to find out what you’re up against, and why your card company has boxed you into a corner. Only then can you begin to fight back.
Help is on the way – just don’t count on it this year. Congress recently enacted a new set of rules for card companies that limits what they can do in terms of cutting off credit, reducing credit lines, and raising APRs. But the rules won’t take effect until mid-2010. So until then, we’re on our own.
Get on the phone. When you get a letter from your card company threatening you with high rates and increased minimum payments, contact them right away. Be polite, be diplomatic, but be firm about it. Ask to keep your current rate intact and threaten to take your business elsewhere if they balk.
Pay the card off. I always like to keep a little bit of credit going, as it helps keep your credit score down, but if push comes to shove and you can’t get your card company to give in, just close the account down and move on to another card. For help in figuring out how much it will take to pay your card off, take a look at our credit card payoff calculator. A bonus, once you play your ace in the hole and ask to pay off your card, your lender may turn all lovey-dovey and ask what it can do to keep your business.
Your answer is short and sweet: "Leave my APR alone and I’ll keep the card."
Look for a new card. This is an extension of my last point, but if you have decent credit, you may well be able to get a better deal with a new card company. I’m a big fan of credit unions and community banks. To move the "do over" process along more quickly, check out our credit card rate comparison site.
If you transfer your balance, I’m generally okay with that. Just watch out for high fees and "false floor" introductory rates that give way a few months into your contract.
You can also keep your credit company at bay by doing the obvious: paying your bills on time, sending in more than just the minimum payment, and cutting back on your card use so you don’t risk maxing out over your card limit. Also, make sure to read your statement carefully.
These are all common sense moves that can largely nip this whole APR thing in the bud.
Past that, go ahead and get mad. It’s not fair that we’re asked to bail out these bums with billions in TARP money, and their way of saying ‘thanks" is to hold us up for more money.
It ticks me off, too. Hey, I’m a New Yorker and I’ve seen stick-up artists operate with more class.
But if you do get that letter, abide by the tips above and keep the card companies from doing any further damage to your wallet. Think of it as one small victory in Wall Street’s war against common sense.
Brian O’Connell contributed to this article
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Alternatives to Bankruptcy offers the following information on debt management.
If you have questions about debt managemet, contact an attorney or a financial adviser/planner. There are viable alternatives to bankruptcy and finding a sound manner of debt management can be a route to dealing with overwhelming debt.
If you are in debt, it might seem like there is no way out. However, if you take the time to look at your options, there may be debt management help at hand.
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Alternatives to Bankruptcy presents the following article published on DenverPost.com. Baby Boomer bankruptcy can easily strain the potential of retirement, however, this article has great pointers on how to possibly avoid bankruptcy. Contact your financial planner or an attorney for more information on your alternatives to bankruptcy.
By Chris Seabury, DenverPost.com
As the baby boomers approach retirement age, many of them are finding that because of downturns in the stock market, declining home values, unforeseen costs (like medical expenses), or just poor planning, they can’t retire and maintain their standard of living. Some people are unable to retire at all, or have to take on second jobs to make ends meet. For others, the only solution is to file for bankruptcy. In this article, we’ll examine the causes of bankruptcy in retirement, what you can do to avoid this situation and what types of special risks apply to retirees.
Why People File for Bankruptcy in Retirement
According to the National Association of Consumer Bankruptcy Attorneys, the number of people over the age of 65 who filed for bankruptcy tripled between 1994 and 2004. There are several reasons for this increase:
* Credit Card Debt
Retirees are not immune to racking up credit card debt. Some people enter retirement with credit card debt, while others accumulate credit card debt in retirement (perhaps to pay for costs they didn’t have before, such as medication or healthcare). Many credit card companies aggressively market toward retirees, but the high interest rates on most credit cards makes paying them off even more difficult for those on fixed incomes.
* Increasing Healthcare and Drug Costs
According to a 2008 study by the University of Minnesota, many pharmaceutical companies are raising drug prices at an astronomical rate. In 2007, the average wholesale price of 26 brand-name drugs jumped by 100%. This can put a real strain on retirees who require several medications.
* A Declining Stock Market
The retirement savings of many retirees have been wiped out - or significantly reduced - because of declines in the stock market. As such, retirees who were counting on having a certain amount of money for retirement have found themselves with dramatically less to live on and not enough to support themselves.
* Reduced Income
Retirees typically have lower income levels than when they are working. If their retirement funds have decreased and they have to look for ways to increase their incomes, they may find that trying to find another job can be difficult because of their age. If they’re left relying on Social Security as their main source of income, they may not have enough money to live on.
Avoiding Bankruptcy
There are several steps that you can take to avoid having to file for bankruptcy in retirement:
* Diversify Your Portfolio Assets
Diversification is the key to ensuring that your retirement savings are not wiped out by bear markets or recessions. As a general rule, you want your money to be spread among different types of investments such as bonds, certificates of deposit, annuities, dividend-paying stocks and mutual funds.
That way, if one type of asset is performing poorly, the shock to your portfolio will be mitigated by the other assets.
* Get A Part-Time Job
Consider taking a part-time job prior to retirement. Particularly when you are building up for retirement, it would be wise to consider this option. This will increase your overall income prior to retirement and then when you do retire, you will have that continued income stream coming in to supplement what you are receiving. This will mitigate the effects of having to take drastic steps to keep up a lifestyle you are comfortable with. (For more on this, see Stretch Your Savings By Working Into Your 70s.)
* Watch Your Spending
When you’re working full-time and are at the peak of your earnings potential, you’ll probably have money to spare, but after you retire, you’ll have to get used to living on a lot less. A way to make your transition into retirement easier is by learning how to get by on less now, before you retire. Make sure that as you enter retirement, you are as free of debt as possible. This can be done by cutting back on spending and using the extra cash to pay off your credit cards, for example. You may be able to handle having a high amount of debt when you’re still working, but debt can be devastating when you retire and your income isn’t what it once was. By simply controlling your spending when you’re working, you can keep debt levels low and increase savings to help you come up with the money you need to make ends meet in retirement.
Unique Bankruptcy Risks For Retirees
When it comes to bankruptcy, retirees face several types of risks that other age groups don’t have to deal with. These risks include:
* Lack Of Time To Recover
When you declare bankruptcy as a younger person, you have time on your side - you can earn enough money to come out of bankruptcy. But many retirees simply don’t have enough time to make the money they need to pull out of bankruptcy. This can make for a devastating retirement and can have negative effects on their overall credit scores. Even when you are retired, your credit score could cause the interest rates that you pay on your current credit cards and insurance rates to increase. These two factors mean that you will have less money available to you in retirement.
* Inability To Make More Money
Many who have already retired have trouble finding employment when they try to come out of retirement and go back to work. They may be forced to work for less money doing menial jobs to try to make ends meet.
* Having To Work Longer
When people file for bankruptcy as they approach retirement, they’ll likely be forced to work much longer than they had expected in an effort to pull themselves out of the financial hole they’re in. This might prevent them from enjoying their golden years the way they had originally envisioned.
Conclusion
Retirement does not have to end in bankruptcy. Through careful planning and controlling the levels of debt that you have while working, you can have a retirement that will provide you with the income you need to add some shine back to your golden years.
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Alternatives to Bankruptcy presents the following thoughts on buying big ticket items during this recessionary period.
Without a doubt, for many big ticket items prices are becoming more and more competitive. As technology develops and becomes more accessible, prices can certainly drop. Furthermore, retailers are offering deeper discounts and attractive offers to get your business.
Remember, the best alternative to bankruptcy is to have a smart money plan. Read on for more information!
Thinking about buying a big-ticket item? Make sure that this is the right move for you since we’re in a recession, especially if it would require a loan.
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Altermatives to Bankruptcy presents the following thougths on consolidating student loans.
Let’s face it, any way you look at it college is expensive and unless you have a lot of money or at least a ton of scholarships, you’re going to have to some type of financial assistance to get you through. Many times that financial assistance comes in the form of student loans.
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Alternatives to Bankruptcy offers the following anecdotal information on how credit card companies are adjusting consumers interest rates and the impact that this has on your ability to pay off that debt.
To address one quick question:
Can credit card companies simply just adjust my rate? YES. Credit card companies send you information at the application process, when you received your card, when you received new cards, and sometimes at other points in between. If they have your email, they may have even sent you emails with all kinds of information. DID YOU READ THAT? Probably not, as at some point in time they notified you that they could make adjustments to your rate. All of that legal "gobbly gook" as I love to call it tells you just that.
You have the ability to work with you credit card company, however. You do not need to take this sitting down. Call them, write them letters, the squeaky wheel gets the grease. Typically, with a sound payment history they will work with you. From my personal experience, I have had a credit card go up to slightly over 18% and with a handful of phone calls and a nice letter asking them for their help, it was brought back to about 11%. It can work!
Furthermore, you can also obtain the CREDIT REPAIR BIBLE. This is an amazing credit resource which assist you in taking your credit into your own hands and ensuring that you are managing your credit, getting what you want from your creditors, and setting yourself up for a more sound financial future.
Credit Card Debt and Rate Jacking - It happened in the moment of the twinkling of an eye; one couple’s financial spiral downward started with an arbitrary interest rate increase; better known as rate jacking. They never had a late payment and their credit score was in the 700s. But that didn’t stop one credit card company from raising their rates. As soon as they did, it started a domino effect; their other credit companies followed suit by slashing their line of credit and also increasing their interest rates. If you have a credit card, you had better read this!
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Alternatives to Bankruptcy offers this article regarding creating a budget when you are unemployed. Is this truly possible?
When you are unemployed, it may seem impossible to create a budget. After all, part of a budget is your incoming funds and how you will allot them to bills, food, utilities, etc. Without income, why bother?
You should still have the discipline of a budget regardless of your employment situation. If you are currently living off of savings, how are you going to account for what you are spending? What if there are significant changes you could make in your budget to adjust your spending and make those savings last longer?
One small, but significant investment you could make is in the Credit Repair Bible. This resources is useful in helping you to repair your credit and prepare yourself for a more financially sound future. While you are seeking employement, you could do so with peace of mind that you are on a budget and have a good credit score to continue to move forward!
Maintaining a budget is difficult under normal circumstances, but trying to balance your checkbook, compute your finances, and make ends meet when you’re unemployed is definitely a challenge. If you were financially savvy when you had a job (that leaves me out) you might already have a budget in place that you can live with by making a few cut backs. For people like me, however, attempting to balance your budget will most likely be very painful.
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Alternatives to Bankruptcy provides the following article about how to save money in this tough economy. One of the most important things you can do to possibly avoid bankruptcy is to create a budget, and know where every single dollar you spend is coming from and going to.
With a budget, you can figure out where you can cut back, and possibly avoid bankruptcy. You can figure out how to address your bills, tackling them one by one, by working with the companies to possibly lower your interest rates or work out a payment plan with you.
There are other alternatives to bankruptcy, and you can take matters in your own hands and work on repairing your credit without paying an agency to do it, or paying expensive legal fees. Check out the Credit Repair Bible, a manual and DVD that will walk you through the process of repairing your credit and creating a more financially sound future for you and your family!
As the economy slows down, we are all looking for a few extra tricks to keep every last buck in our pockets. See what people are doing to help stretch every dollar to the max.
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Alternatives to Bankruptcy offers the following thoughts on using a Debt Counseling organization to assist you with your debt issues. Make sure that you indeed "shop around" as unfortunately, there are fraudulent companies and scam artists out there willing to prey on you when least need it!
There are other alternatives, and you may be able to do much of your credit repair work yourself, for much, much less money. Refer to the Credit Repair Bible, a manual and DVD that offers ways for you to repair your credit and create a more financially sound future for you and your family.
Anyone who has ever performed an online search to find the answer the question, "What is debt counseling?" Will quickly learn how little information is available on the subject. The truth is no one really addresses the question with straightforward answers. One thing is for certain; there is an ever-growing list of companies that classify themselves as debt counseling organizations. What are they supposed to provide? Should they be licensed and/or certified? What type of training should they have? How can we tell the legitimate ones from the charlatans? We’re going to answer those questions and more…
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