Banks asking for credit card debt forgiveness
Date: Mon, 11/03/2008 - 12:26
from Yahoo news 10/30/08
As defaults are increasing they’re working with consumer groups\
WASHINGTON - With defaults on credit card debt spiraling amid a global financial downturn, banks already reeling from the mortgage crisis are losing billions more from unpaid credit card bills.
Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven, a turnabout from recent years when the banking industry lobbied strenuously to make it harder for consumers to erase their credit card debts in bankruptcy.
The new pilot program  which the banks hope will become permanent  could involve as many as 50,000 people struggling with credit card debt. On an individual basis, the amount of debt to be forgiven would rise according to the severity of the borrower's financial situation, up to a maximum of 40 percent.
Not fitting the bill
This is more crazy than the idea to bail out all these mortgages. When will we let the economy act on its own? We let the Fed massively lower interest rates to create this bubble. Then we bail out banks and people who bought over valued homes.... Now we want to offer credit card debt forgiveness?
No offense to people in serious hardships, but this will continue to smash our economy. Gotta understand where all this money is coming from... INFLATION for all!
Would involve as many as 50,000 people? That's a drop in the bu
Would involve as many as 50,000 people? That's a drop in the bucket, compared to the amount of people having credit card problems. And you would probably still get the 1099's, meaning you would have to claim the amount of forgiven debt as income on your tax return. Which still could end up costing you thousands of dollars.
If the government wants to get involved, what they ought to do is crack down on these credit card companies that charge outrageous interest and fees. The companies would still make hundreds of millions, if not more, if they charged people only 2% interest. If the government is going to deal with the greed on Wall Street, they should do something about the greed of credit card companies (although not on the taxpayer's money). If these companies are losing money because customers can't pay their bills, the interest rates are part of the problem. These companies deserve their hardships. Force them to be fair, and not be glorified loan sharks.
Thank you! That's exactly what I am saying. However Susie, every
Thank you! That's exactly what I am saying. However Susie, everything I am reading is indicated the creditors are lobbying that the debtors not be taxed for the forgiven debt.
If I owe the bank a million dollars, I have a problem. If I owe
If I owe the bank a million dollars, I have a problem. If I owe the bank a billion dollars, THEY have a problem. Guess what? We owe the CC comps billions in the middle of a hundred-year recession. Looks like they have a problem...