Americans Feel The Pinch:
by Matt Killikelly

With the new bankruptcy law in force this fall and credit card companies virtually doubling their minimum payments within the next few months, a major shift in American personal finance has arrived. The new bankruptcy legislation was signed into law in April 2005 and took effect on October seventeenth. This new law makes it significantly harder to discharge debt through bankruptcies and will benefit credit card companies by significantly reducing losses they experience due to bankruptcies. In a related move, prompted by a 2003 directive, credit card companies in America are raising their minimums, ostensibly to improve a borrower's ability to payback their balances more quickly and encourage more prudent use of credit cards. With two such important changes happening simultaneously there will undoubtedly be some negative long and short term effects and perhaps even some benefits.

Tags: bankruptcy law congress creditcard payments