Raising Interest Rates News

Posted On: 2005-09-02
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Only 44 days left until the bankruptcy laws change.

Hello everybody. It's Jay with the Debt Podcast. Thanks for subscribing. Today is Friday, September 2, 2005. If you're listening to us through iTUnes or an RSS reader or online streaming media, you can check out the show notes at debtpodcast.blogspot.com. You can also go onto my law firm web site, the Debt Relief Center of New York, for bankruptcy and consumer law information at www.drlcny.com. If you've got any questions or comments, you can send your email or audio feedback to debtpodcast@gmail.com. Today's show is going to focus on some consumer and bankruptcy law news, as well as some great podsafe music. Before we get into that, I would like to direct all of you over to the show notes at debptodcast.blogspot.com for a list of charities working on Hurricane Katrina relief. Take a look at them. Please donate your time, your money. If you've got extra clothing or if you're local and you've got some extra food, there are also a number of sites that are going to be set up within the next few days so that you can post if you've got the availability to shelter any individuals who are being left as refugees, and that goes for people, that also goes for pets. There are a lot of pets out there who got nowhere to live. They've got nobody to feed them, and they are dependent on humans for their well being. So check out the show notes.

Now, understandably, a lot of the news that I've got to talk about today, that's gone on this week deals tangentially at the very least with Hurricane Katrina. I would like to start off with an Associated Press article that ran on Monday that proclaimed that Americans are vulnerable to rising rates due to growing debt loads that they're carrying. The article notes that some economists are now warning that runaway spending and borrowing have the nation on track toward a major economic crash. The article looks to ballooning balances on credit cards and mortgage loans caused by low interest rates as the culprit in allowing American consumers to accumulate nearly 11 trillion dollars, That's trillion with a "t" in debt as they buy more homes, more cars, more clothing, go out to dinner more. The article discusses our rise in interest rates of three or four percentage points, which strain the economy because borrowers would be forced to greatly increase the amount they would have to pay each month on their debt service. The head of a credit counseling outfit in Florida points out that some American borrowers are already in trouble, and more are likely to stumble as interest rates rise and the new bankruptcy laws make it harder for consumers to be relieved of their debt. He fears that we'll soon see creditors getting more aggressive at collecting debt. This, he says, will turn many borrowers into the walking wounded, struggling to keep up with card payments and limited in what they can buy, which will be in turn, a massive drag on the U.S. economy. Why is it that pundits weigh in only after the problem has become evident to anyone who's been...