Latest Methods of Credit Card Debt Relief
The New York metropolitan area has seen the greatest figures of bankruptcy filing as compared to other regions of the country. 175 filings per day - the rate registered in September that involves individual as well as business claims. The figures were revealed by the federal bankruptcy courts which also stated deplorable facts about New Jersey and Connecticut.
The two cities showed the greater than the nation's increase rate of bankruptcies - the increase by more than 36% in this quarter.
Along with other consumer payment obligations, credit card debt is growing and the lenders are pressing on it to be repaid. Earlier credit card debt solutions were available and affordable to masses of consumers and could bring relief through debt counseling or consolidation services. Now, as the unemployment is reaching its record high, people cannot find means to pay for help. Most of them started turning to court and declaring themselves bankrupt as the last resort to escape the debt burden. Unemployment is of course only one of the factors that led to the high consumer debt rate. The economy slowdown, tighter credit and rising defaults have forced banks and companies to extremely elevate APRs even on good accounts. Feel the difference between what you are paying with 8.99% or 10.99% APR and, say, 28% of interest charges. This makes consumers either seek new, balance transfer credit card applications, which have been times harder to find, or, as the recent practice shows, file for bankruptcy. Luckily, the "new" bankruptcy law (accepted back to 2005) is not a barrier any longer because most of debtors just cannot pass that means test as a result of job loss. What we are seeing now is people who had really well-paying jobs are seeking court protection from their creditors.
Debt collection agencies add fuel to the fire. Their approaches have grown more aggressive in the last couple of months, distressing the customers and taking peace out everyday life. Also, debts are sued much earlier than they used to, leaving people with fewer options. Evidently, the only reasonable solution in such pressing environments is to declare bankrupt. The majority of filings were made on the individual basis under Chapter 7 of the federal bankruptcy law, which is known as liquidation of debts. This is a rather easy path, as for most filers all their assets are exempt from seizure. This varies from state to state, though. Business filings constitute only a small percentage so far, but they are likely to continue growing. Two of the biggest businesses are known to have filed already - Lehman Brothers (an investment banking institution) and Steve & Barry's discount clothes chain store.
Credit card debt is not going to let off in the coming future. If you do not want to risk hurting your reputation and credit history (bankruptcy stays in your credit report for up to 10 years), you might want to consider debt counseling and have a repayment plan worked out for you. But you should be ready to fork out for the service, which is rather doubtful considering the rising living costs and growing unemployment.
You should also be ready to deal with credit repair in the long run. When the time comes, apply online for a special credit card for after-bankrupts.