Payday Loan Companies Prey on Military Personnel

Here is an interesting article on a new report issued by the Department of Defense finding that payday loan companies are taking advantage of military personnel.

These companies generally prey on more than just military personnel. I often have people come into my office and tell me they took out a $300 loan that will result in $350 being taken out of a paycheck in 2 weeks. That's over 400% interest. One other thing that bothers me is that the payday loan people often tell my clients "you can't file bankruptcy on a payday loan." This is completely false. First, payday loans are not exempt from the bankrputcy process. Second, the whole idea of filing bankruptcy "on" a debt is one of the bankruptcy myths. You have to list ALL of your debts in a bankruptcy.

Personal Bankruptcy Filings Plunge in Quarter - Los Angeles Times

Click here to read about the tremendous drop in bankruptcy filings over a year ago. Bankruptcy filings in Fresno are also down significantly. There were 732 Chapter 7 filings for the first six months of 2006, compared with 4704 for the same period in 2005, a drop of 84.4%. Chapter 13 filings were also down, although not as much. There were 222 filings in the first six months of 2006, compared with 539 a year ago, a drop of "only" 58.8%. Click here for the detailed statistics.

Of course, the main reason for the precipitous drop in filings is that most people who were thinking about bankruptcy filed before the new law went into effect on October 17, 2005. The other reasons for lower filing numbers are: (1) misinformation regarding the availability of bankruptcy after the new law went into effect, (2) higher attorney fees necessitated by the increased work for attorneys under the new law means that people have a harder time affording a bankruptcy filing, and (3) the new law has made it harder for some people to file.

It appears that the new law may have succeeded in accomplishing exactly what the credit card industry hoped for. If they can get debtors to pay for even a few more months than they would have under the old law, the credit card industry could reap billions in additional profits. And it looks like that is coming to pass.

It is important to remember that bankruptcy is still an option and most people will still be able to file under the new law, although everyone has to jump through a few more hoops to do so now. Click here to see other common bankruptcy myths debunked.

Credit card minimum payments doubling

Toward the end of 2005, many of the credit card companies began increasing minimum required monthly payments. In many instances, the payments doubled. See here and here for more information. I noticed that quite a few clients during the first six months of this year were forced to consider bankruptcy because of the minimum payment increase. I'm curious how much the payment amounts have actually gone up for others in the Fresno area. If your monthly minimum payments have gone up, please post a comment stating the percent your minimum payments increased.

Thanks,
www.fresnobklaw.com

Report finds credit-card firms push users deeper into debt

This news article discusses a new report that accuses credit card issuers of pushing consumers to borrow beyond their means. The new bankruptcy law was enacted to keep more people from filing bankruptcy, but as long as credit card companies push people to spend beyond their limits, there will be a need for the fresh start that bankruptcy provides. Click here for more bankruptcy information.

Foreclosures jump 90% in San Joaquin County

Three factors are coalescing to form the perfect storm for foreclosures in the residential real estate market: (1) increasing interest rates, (2) decreasing real estate values and (3) an abundance of variable rate mortgages. For example, the number of foreclosures in San Joaquin County, California increased by 90% for the second quarter of 2006. Chapter 13 bankruptcy can be used to catch up mortgage arrears. For more information, go to www.fresnobklaw.com.

Fresno Bankruptcy Law Website

For more information about bankruptcy or to schedule a free half-hour consultation with a Fresno bankruptcy lawyer, visit www.fresnobklaw.com.