According to the Times, many credit card issuers are technically complying with the law, but essentially continuing with what some consider predatory lending practices. Here’s a look at what some card issuers are reportedly doing and what you need to know to keep your finances in order.

• Changing the names of fees: While the CARD Act limited certain types of fees credit card issuers are allowed to charge (including late fees and overdraft fees), many issuers are apparently getting around the restrictions by bringing back old fees (like the account initiation fee) to make up for potentially lost profit.
• Adding new fees: Sources note that one nefarious-sounding credit card issued by First Premier Bank justified its excessive fees ($179 on a card with a $250 limit) by noting that the new law does not restrict fees charged before an account is activated—not exactly the kind of thing the typical credit card user is expecting.
• Maintaining murkiness about terms and conditions: While some credit cards have been praised for their increased transparency, others, it seems, continue to shroud their agreement terms in complex language or difficult-to-find fine print.
• Review your agreement: If you’ve never read through your credit card agreement, now may be a good time to try to work through it. If the legalese is too dense, you may want to consider visiting a lawyer for a brief explanatory consultation, so you know what to expect and how to avoid costly fees in the future.
• Treat your card like cash: Perhaps the best way to keep your head above water with credit is to never charge more than you can pay off at the end of the month. That way, you’ll avoid paying interest and you won’t have to worry about which rate applies to which purchases.
• Call your card issuer: If you see a fee that surprises you, don’t hesitate to call your bank’s customer service department to ask for an explanation. In some cases, banks will waive a first-time fee and you can learn not to repeat whatever behavior caused it. If your bank won’t dismiss the charges, at least you’ll know what not to do in the future.

Protect Yourself and Your Credit

So what can an ordinary credit card user do to make sure she isn’t getting duped by her credit card company? Consider taking these steps, which can help make sure you’re on track with your credit.

Remember: credit cards are often an essential part of modern life and can be invaluable to those rebuilding credit after filing for personal bankruptcy. But using a credit card without fully understanding how it works can lead you into dangerous levels of debt—so make sure you understand the details of yours.

Additional Resources

Credit CARD Act

Identity theft is a difficult crime to predict, but there are some things you can do to make yourself less vulnerable to thieves. Here’s a look at some of those strategies, adapted from this article:

• Opt out of pre-approved offers: For many of us, the sight of pre-approved credit offers in the mailbox is perhaps more familiar than we’d like. After all, those offers can come with sensitive personal information pre-entered—and all an identity thief would have to do would be pluck one out of the trash, fill it out and voila! your identity would be stolen. So consider opting out of pre-approved offers, which you can do here.
• Thin the herd: By cutting down your total number of credit cards, you can cut down your risk of identity theft (as in, fewer chances of losing a card, fewer chances of a bill getting in the wrong person’s hands, fewer chances of having your number taken from online, etc.). Some insiders recommend sticking to credit cards that have your photo on them for maximum protection.
• Guard your SSN: It seems like you can hardly turn around without someone asking for your Social Security Number—and if you aren’t comfortable giving that piece of information out to just anyone, you’re not being paranoid. Many companies that request your Social don’t actually need it, so always whether it’s absolutely necessary, and if it is, ask how it will be used.
• Pick up checks and credit cards: It may be slightly inconvenient to drive to the bank to pick up new checks or an updated card, but making the trip takes potential theft out of the equation. Plus, you’re less likely to leave sensitive documents unopened in a stack of unread mail when you pick them up yourself.
• Learn to shred: We all have to get rid of documents with our personal information on them (doctor’s bills, bank statements, credit card bills, etc.). And, while high-tech identity theft is certainly a concern, plenty of identity thieves still get their information from sifting through the trash or recycling. So make sure you shred any sensitive documents before tossing them.

Identity theft can lead to someone draining your bank account, running up a steep balance on your credit card, opening new lines of credit in your name and other frightening financial moves. So keep yourself and your credit safe by guarding your personal information the way you would your other valuables.

Additional Resources

Identity Theft

According to the FTC, here’s what timeshare owners should watch out for when working with someone claiming to help them get rid of their property:

• Do a background check: It seems some scammers will claim that local interest for buying timeshares is significant, that their office has been flooded with calls about properties, and that conditions are otherwise ideal for you to get rid of your property quickly. But, before agreeing to anything over the phone, visit a few web sites: the Better Business Bureau (bbb.org), your state’s attorney general’s office (naag.org) and consumer protection agencies near you (consumeraction.gov). Check to see if any complaints have been filed against the company you’re considering working with.
• Get everything in writing: Any offers, agreements, contracts, payment schedules or any other business transactions need to be on paper before you commit.
• Check for a license: Real estate agents must be licensed to sell property by area—ask whether your agent is licensed in the area where your timeshare is located. If the answer is yes, double-check this information with the state’s licensing commission.
• Get specifics: Find out how and where your property will be advertised and how often progress reports will be issued.
• Understand the fee system: The FTC notes that companies that take their fees after your property has been sold are preferable to upfront fee takers. If your agent insists on an upfront fee (and seems otherwise acceptable), ask about refund policies and get them in writing.
• Don’t be too optimistic: In this market, the FTC warns, you may not be able to recover your full purchase price with a re-sale, especially if you’ve only had the property a short period of time and/or it’s in a relatively unknown location.
• Get an appraisal: To get an idea of how much your property is worth, have a timeshare appraiser give you an estimate. And it’s a good idea to make sure the appraiser’s license is up to date.
• Know what to look for in a contract: Before signing anything, check to see what specific services the reseller is agreeing to perform, costs you’re responsible for, whether you can rent or sell the timeshare while the reseller is trying to sell the property, whether you’re responsible for closing costs and how long the re-seller will attempt to sell your property.
• Don’t be afraid to say no: If you don’t like what you see in the contract, it’s okay to back out of an agreement and/or negotiate different terms.

For a more detailed list of suggestions and warnings, visit the FTC’s web site.

Here’s a look at some highlights from the study and what they might mean for you, other bankruptcy filers and the nation’s bankruptcy system.

• More expensive to file: One of the changes made by BAPCPA was that the fees required to simply file bankruptcy paperwork increased. This means that, on the most basic level, filing for bankruptcy got more expensive for struggling consumers. But the cost increases don’t stop there.
• More requirements to pay for: In addition to the increased cost of filing, BAPCPA introduced new requirements that filers have to complete in order to obtain a bankruptcy discharge from the court. These requirements include two courses filers must complete (credit counseling and debtor education), and both cost money, bringing the overall cost of bankruptcy up even more.
• More lawyer hours required to file: Because BAPCPA introduced more stringent qualification standards for Chapter 7 bankruptcy, the study reportedly found, bankruptcy lawyers often had to invest more hours in individual cases to determine which type of bankruptcy protection (Chapter 13 or Chapter 7) would work best for their clients. In some cases, this could mean more money spent on attorney fees for clients.
• More trustee hours required in cases: And the increased costs didn’t stop at the attorney level. It seems that bankruptcy trustees (who oversee bankruptcy cases) have also seen their hourly investment rise since the passage of the 2005 law.

So what do all these cost increases come to for the individual consumer? According to the WSJ, the average bankruptcy filer today pays 55 percent more to get financial protection than the average consumer paid in 2003 and 2004. And, perhaps ironically, the increased expenses have had an unanticipated effect: less money going to creditors.

Credit card companies were among the most vocal supporters of BAPCPA in the years before it passed. Because the new law would make Chapter 7 bankruptcy more difficult to qualify for, logic suggested that fewer consumers would be able to discharge their credit card debt in bankruptcy.

But, as data from this study suggest, the increased expenditures mean that bankruptcy filers actually have less money left over to repay their debts, meaning that creditors get less money because there’s less available to distribute.

The study was apparently a preliminary effort and will be expanded in coming months.

Additional Resources

Evaluative Study of BAPCPA

According to the article, a growing group of Americans are disenchanted with large financial institutions after watching the financial crisis unfold. While many are still comfortable with traditional banks, this new group is looking for new ways to find financing.

Here are some of the ways that Americans are, as Forbes puts it, “de-banking”:

Taking out loans against retirement funds

While it’s not necessarily what a financial adviser would recommend, there has been a rise in 35 to 55-year-olds borrowing against their retirement savings.

A study done by Fidelity Investments found that of 11 million people surveyed, almost 22 percent have an outstanding loan against their retirements in April, May and June of 2010. That’s a rise from the 18.1 percent measured in early 2001.

Fidelity also registered a 2.2 percent increase in those who withdrew from there 401(k) as a result of financial hard times during 2010’s latest quarter.

Forty-five percent of those people took out another loan against their retirement a year after their first one.

Going directly to investors

Some big corporations are going directly to investors for loans and financing, according to the Financial Times.

In the first half of 2010, companies borrowed directly from investors to the tune of $27.4 billion, nearly matching the $28.5 billion raised directly in the entire 2009 year.

Mid-market groups typically like private investment placements, because it helps them to build relationships with investors. It’s not only smaller markets, though. Big companies like Heineken and Millennium Pipeline have done the same.

The friends and neighbors approach

Peer to peer lending is increasingly an option as online networking empowers people and investors to connect with one another.

Social lending sites are often powered by those who work for themselves and who might not be as appealing to a traditional banking investor.

Sites like Prosper.com and Lending Club put investors in contact with borrowers. Depending on the site, loans from $7,000 to $25,000 can change hands, for everything from tuition to business start-up funds.

• In 2005, a new bankruptcy law (the Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA) took effect and made qualifying for bankruptcy protection slightly more difficult for individuals.
• In the months preceding the changes, record numbers of people filed for bankruptcy, many of whom might have ordinarily waited, but who feared they might not qualify under the new standards.
• Directly after BAPCPA took effect, filings dropped off significantly (because so many people filed right before the new law hit), but in the years after, filings climbed upward steadily.
• Now, as we’re working through the worst economic downturn since the Great Depression, bankruptcy filings are topping the one-million-per-year mark, but are perhaps not nearly as high as they could be.

The point made on Credit Slips is that, while an estimated 1.6 million homeowners are 90 days or more delinquent on their mortgage payments, only about 400,000 Chapter 13 bankruptcy cases will be filed this year. This is surprising in part because Chapter 13 bankruptcy is known for helping homeowners avoid foreclosure because:

• The automatic stay takes effect as soon as a petitioner files her bankruptcy case with the court, may remain effective for the duration of the bankruptcy case (usually three to five years) and can prevent all collection actions from creditors, including foreclosure.
• The debt reorganization and repayment plan that Chapter 13 filers agree to typically includes a reshuffling of some debts and a discharge of others, which often frees up the money necessary for filers to catch up on their mortgage payments.

In other words, bankruptcy protection has the potential to help more struggling homeowners than are currently taking advantage of it.

The Dangers of Not Considering Bankruptcy

While filing for bankruptcy is not the solution in every debt situation (or even in every foreclosure situation), failing to consider bankruptcy early enough in the process of getting out of debt can have a seriously negative impact on your finances. Why?

Because some of your assets are exempt. While laws differ depending on where you live, every state has certain bankruptcy exemptions—property that the bankruptcy court cannot legally collect as payment for your debts. This means that those who might be helped by bankruptcy protection could be depleting resources (including retirement funds) that would have been protected had they filed for bankruptcy.

The question raised by Credit Slips is an important one, and serves to reinforce the importance of considering bankruptcy early enough that it can offer you its full benefits. Not sure about your case? Consider consulting with a bankruptcy lawyer in your area to help walk you through the specifics of your case.

The information included in this post is only general information and is not meant to be construed as legal advice. If you are in debt and facing foreclosure, consider speaking with a local bankruptcy attorney.

• As of June 30, 2010, 11.4 percent of U.S. household debts were considered delinquent (which generally means 30 days or more past due).
• On March 31, 2010, 11.9 percent of such debts were delinquent.
• On June 30, 2009, 11.2 percent were delinquent.

According to the report, delinquency rates had increased steadily since the first quarter of 2006, when they hovered at slightly less than five percent of household debt. It seems that, once the housing bubble burst and the stock market began to tank, household delinquency shot up.

Sources suggest that the decrease in delinquencies is the result of two major moves by consumers:

• Paying down existing debt: As part of the tight economy (including limited access to loans and reduction of job availability), many consumers are focusing on eliminating debts they currently hold. Various studies have suggested that we are, as a nation, taking on less consumer debt now than we did during boom years (likely both because of tighter lending standards and a desire to prepare for potential economic shocks).
• Filing for personal bankruptcy: Whether consumers opt to file under Chapter 13 or Chapter 7, part of a bankruptcy filing generally includes a discharge of some unsecured debt. Once those debts are discharged, consumers are legally excused from paying them, and they’re essentially removed from the total picture of household debt.

Perhaps unsurprisingly, the Fed’s report indicates that both the total household debt and the percentage of that total occupied by mortgage debt have increased significantly since the beginning of 2004. Data from the last two years suggest that both totals are beginning to inch downward, but are still significantly higher than they were before the housing boom began.

Implications for the Economy

So what might these numbers mean for the larger economy? It may be too early to say. As mortgage debt has risen (both in total and as a percentage of all debt), so have mortgage delinquencies, showing a serious upward leap began in 2006 and peaked in the first quarter of 2009.

But it’s still too soon to say whether that 2009 high will remain the top of the graph—in the quarters since then, the total amount of mortgage debt has fluctuated enough to leave doubt about whether it’s on a steady decline.

Additional Resources

Fed’s Quarterly Report on Household Credit and Debt