Saturday, December 15
Friday, December 14
According to the American Bankruptcy Institute, non-business bankruptcy filings in the Northern District of New York through the third quarter of 2007 are up by 47% over last year. In 2006 through the third quarter, there were a total of 5,269 non business filings in the district. Through the third quarter of 2007, there were 7,761.
This sign of the times is alarming. In 2005, the Bankruptcy laws were changed to make filing for bankruptcy more of process to complete, for example, the law requires a certificate from an approved debt counselor before a discharge can be issued.
Recently a bill introduced by Barney Frank (D-MA) and passed by the House requires the licensing of mortgage loan officers and virtualy anyone involved in the mortgage loan process. Like attorneys and realtors, this licensing could incorporate educational requirements for the loan originator.
For years and years, mortgage loan officers and the like have been helping people with home ownership. Sure, they were making money, and in many cases a lot, but is there anything wrong with that? Afterall, everyone that I know who works for a living gets paid, some more than others, some not as much.
Anyway, isn't it curious that there aren't any regulations requiring consumer financial education and certification BEFORE getting into financial trouble? No, our laws say that only AFTER finding yourself in financial ruins are you required to receive financial counseling. What is there to learn?
Exuse me while a rant for a minute. Here's what there is to learn. Go out and be entirely fiscally irresponsible. It's okay to open a new credit card every chance you get! Sure, go ahead and charge all of your groceries, your cable Tv, your electic bill; hey, might as well put the neighbors bill on it to because once it gets to be too much, you can just NOT PAY! And, if the heat gets too hot, you can file bankruptcy just as long as you get the requisit finacial counseling!
Sure, get one of those payment option arms. Don't know what that is? That's okay because WHO CARES ANYWAY! You mean to tell me that instead of paying rent of $800 per month, I could be living in a $500,000 house for the same money? What? I don't need any money down either? Well, where the heck do I sign!
Alright, now that I've got that out of my system, the new bankruptcy laws are intended to curb the abuse. In many cases, secured lenders are in much better shape now than before the law was changed. But, the consequenses of bankruptcy remain so insignificant that nothing is a deterent other than ones own ethics. Remember those?
Thursday, December 13
It's that time of year again, and our credit cards are bulging! Do we have a plan to pay these off before next season?
Here is some interesting information found at the Motley Fool's Credit Center
-Total consumer credit: $1.7 trillion.
-Credit card debt carried by the average American: $8,562.
-Total finance charges Americans paid in 2001: $50 billion.
-Percent of U.S. households deemed credit worthy by the lending industry: 78%.
-Number of credit card holders who declared bankruptcy last year: 1.3 million.
According to another article, paying off your credit card could actually cost you more!!
From a credit score perspective, having a low (or no) balance on a credit card will lift your credit score. As a matter of fact, 30% of your credit score is based on the balances that you owe.
Having credit accounts and owing money on
them does not necessarily mean you are a highrisk
borrower with a low FICO® score. However,
when a high percentage of a person’s available
credit has already been used, this can indicate
that a person is overextended, and is more likely
to make some payments late or not at all.
Keeping a balance isn't always a bad thing. For example, I have a credit card that is charging 1.9%. My savings account is paying 4 something. By not paying the account in full, I still get to earn a couple of points on my money. If you DO keep a balance, don't keep the card maxed out. This will kill your credit score.
Like anything else, credit cards are a good thing if used in moderation!