This is a continuation of The Institute for Financial Literacy’s Annual Consumer Bankruptcy Demographics Report for 2010. Part 1 of this blog covered income, education and cause of financial distress.  Part 2 covers the remaining areas: gender, age, employment and marital status.

Additional Key Findings

The largest increases from responders in the last five years were those in older age groups, self employed, and married. read more »

The Institute for Financial Literacy released its Annual Consumer Bankruptcy Demographics Report. This report included not only 2010 demographic information, but also comparisons to data collected since 2006. They surveyed their clients, who were fulfilling requirements according to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).  The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 required individuals to complete mandatory credit counseling in order to be eligible to file a consumer bankruptcy case under the bankruptcy code. The law also required certain debtors to complete a mandatory financial management instructional course to receive a discharge of their debts.  For purposes of this study, they didn’t know if the client filed bankruptcy after the credit counseling.

The survey covered January to December 2010, and included 52,851 of their clients from the 50 states, Northern Mariana Islands, Virgin Islands and Guam. The information surveyed included gender, age, education, income, employment, marital status and causes of financial distress. read more »

Equifax, one of three consumer credit reporting agencies that houses over 200 million consumer credit reports and markets and sells consumer credit scores, released their latest National Trends Report the end of September. Equifax used data from their consumer and business databases to provide consumer credit information on the following markets: auto, banking, credit cards, mortgage and student loans. The study showed growth in auto and bankcard. There was more new credit available in the first half of 2011 (January thru June 2011) compared to the last two years.  There was $370 billion in new credit available from January to June 2011, compared to $327 billion in the same period in 2010, and $338 billion in the same period in 2009. read more »

In previous blogs I have discussed the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit Card Act or CARD Act). The Federal Reserve approved a rule that amended Regulation Z to clarify the Credit Card Act, which became effective October 1, 2011.  Before I discuss the rules, I want to refresh your memory on both the Credit Card Act and Regulation Z.

Credit Card Act

The Credit Card Act’s purpose was to protect consumers from certain abusive practices by credit card issuers.  Some of the changes involved unfair interest rate increases and changes in terms; advanced notification of increases; how payments are applied; fairness in due dates and times. For example, the Credit Card Act required that bills be mailed 21 days prior to the due date instead of the norm which was 14 days. read more »

Recording machines across the nation are being clogged with prerecorded phone calls from companies that claim to be able to negotiate significantly lower interest rates with your credit card issuers, if you just pay them a fee first. According to The Federal Trade Commission (FTC), the nation’s consumer protection agency, consumers who get these interest rate reduction robocalls should listen to them with extreme skepticism, and delete them. Many are scams.

The companies behind the sales pitches claim to have special relationships with credit card issuers. They guarantee that the reduced rates they offer will save you thousands of dollars in interest and finance charges, and will allow you to pay off your credit card debt three to five times faster. They claim that the lower interest rates are available for a limited time and that you need to act now. Some even use money-back guarantees as further enticement. (The FTC frowns heavily on guarantees) read more »

The housing market hasn’t recovered from the recession and CoreLogic tracts this market through its propriety databases. CoreLogic recently released a study of negative residential equity covering the second quarter of 2011.  CoreLogic provides consumer, financial and property information to businesses.

Negative equity exists if your mortgage balance is higher than the home’s value. This is usually because market value decreased or mortgage debt increased or a combination of both.

There are approximately 48.5 million residential properties with a mortgage in the U.S.; 10.9 million or 22.5 percent of mortgages had negative equity in second quarter of 2011, down from 22.7 percent in first quarter of 2011. An additional 2.4 million had less than five percent equity, which is considered “near-negative equity”. The combined group with negative and near-negative equity are called “below water”. The combined total of the “below water” group was 13.3 million or 27.5 percent. read more »

For all those students who graduated in the Spring and funded their education with student loans, you’re in for a surprise this November…invoices.  That’s right, the 6 month deferment window will be expiring and your loans will become “due and owing.”  This means you’re going to have to start making payments.

Be aware that student loans are very different than any other type of consumer loan product.  Here are some of the more significant differences between the loan types; read more »

When you contact a consumer credit counseling service or undergo a debt management plan, this action does not negatively impact your credit score.  At one time it did, but FICO made changes years ago to their scores, which was an advantage to consumers. Bankruptcy laws require individuals filing for bankruptcy to undergo credit counseling within 180 days of filing for bankruptcy. Credit counseling is considered a positive move to take care of your debt instead of filing for bankruptcy.  The creditors have a better chance of getting some money if you contact to a credit counselor. read more »

In past articles I’ve discussed debt consolidation through bill consolidation, home equity loan and credit card balance transfers.  Another option is to enter into a Debt Management Plan (DMP), which is a plan managed by a third party company, which can be a for-profit or non-profit company.   This company assesses your ability to pay and what you owe. read more »

A credit card balance transfer offer can be used to move your credit card debt from a high rate card to one with a lower interest rate, and as a way to consolidate your credit card debts.  Credit card companies offer incentives to do this; they want to be your preferred credit card.  You need to consider the fine print regarding the fees, interest rate and penalties.  Keep in mind that the interest rate can fluctuate on this card after the introductory offer has expired. read more »