Pennsylvania Credit Card Debt

Today it is incredibly easy to be swimming in credit card debt. Any of us could easily find ourselves faced with this overwhelming burden. In these times, many individuals suffer from financial jeopardy. Americans continue to lose their jobs. Even a minor illness can wreak havoc on an individual's checkbook. Today, providing what we need for ourselves and our families has become incredibly difficult.

With creditors constantly calling and threatening notices received in the mail, debt-ridden consumers find themselves overwhelmed. What should you do? Several options are available for consumers, but how do you choose the right one? When it seems as though every creditor is working against you, how do you find help?

We understand the enormous impact brought by consumer debts. We feel it is morally imperative to share our insights. First, we will examine Americans' consumer debt. Second, we will describe work towards or against consumer debt reform. Third, we explain the importance of consumer advocacy. Lastly, we will discuss how to resolve consumer and credit card debt with the aid of reputable debt counseling programs.

The State of Consumer Debt

Since the early 1990s, United States' household debts began to astoundingly increase. In 1990, the total consumer general and credit card debt was less than $4.0 trillion. This number skyrocketed; by 2008 Americans were financially behind at the tune of $13 trillion.

Home ownership has also seen dramatic negative effects to U.S. homeowners. Total home mortgage debt rose from nearly $2.5 trillion in 1990 to almost $10.5 trillion in 2008. By simply pursuing the American dream of owning their own home, individuals now struggle financially.

"Revolving" or credit card debt has also climbed outrageously. While these debts were around $239 billion in 1990, figures from 2008 place Americans' credit card debt at close to $950 billion total. Each American household is burdened by approximately 6 bank credit cards, 8 retail cards, and 2 debit cards. These credit lines overwhelm consumers with the sharp increases in late fees, interest rates, and penalty interest rates.

The credit card industry encourages debt, despite the incredible rates of past due credit card balances. Companies constantly encourage Pennsylvania consumers to open more credit card accounts. Over 5 billion new credit card offers are mailed to over 200 million Americans each year. As PA residents find themselves financially hurting, these offers are enticing as they can provide a new cash flow. Unfortunately, obtaining new credit cards to eliminate other debt simply worsens consumers' financial health.

Unfortunately, young Americans are among the worst affected by financial turmoil. Many find themselves underwater when they pay for college, buy their first home, or start raising a family. On average, undergraduates have a $2,200 credit card balance and will end with nearly $20,000 in total student debt. Due to these financial hardships, it is no surprise that bankruptcy rates have increased the most among the 25-34 year old age group.

Pennsylvanians were struck by economic hardship over 8 years ago. Record numbers of citizens have lost their jobs. PA citizens also struggle beneath substantial credit card debt, a major cause of bankruptcy. Individuals in communities throughout the state are faced with this predicament. In Lebanon, the average credit card debt total increased 152% over a ten-year period. Overall, U.S. bankruptcy courts in Pennsylvania have become overweight with filings. In 2007, filings increased by 38% over the prior year.

The economic disaster felt by state residents is at an all-time high. The Middle District of Pennsylvania bankruptcy court reported that most filers sought Chapter 7 protection with complete debt discharge. This type is considered the most extreme form and is usually reserved for individuals with significant debts.

Consumer Debt Laws

Unfortunately, despite the rise of recession, financially-troubled consumers were instead negatively impacted by federal legislation. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was enacted. Pennsylvania already suffered from widespread financial hardship and now citizens were dealt a tougher deal.

The new federal law essentially prevented the discharge of debt through bankruptcy. Through its means test, filers now had their income to expense ratio sharply analyzed. This aimed to place consumers in a debt repayment plan through Chapter 13 bankruptcy. Chapter 13 can require payments at impossible monthly rates, unlike a Chapter 7, which forgives the majority of debts.

The BAPCPA legislation did not have its intended effect. In particular, when recession hit Pennsylvania communities, the tables were turned. Creditors soon became dismayed when bankruptcy filings began to again skyrocket.

Over the past year, Americans have felt the effects of more consumer-friendly debt reform. President Obama's administration implemented the Home Affordable Modification Program, which aims to help homeowners avoid foreclosure. Consumer advocates do question the program's benefits. The plan reduces homeowner payments through a cap on the amount consumers spend on their mortgage. Reform proponents have accurately pointed out unemployed homeowners without an income are not aided by the modification.

Pennsylvania Consumers Need Advocacy

Consumers in debt require the advocacy of a trained professional. Without an advocate consumers may suffer unnecessary consequences. Debt consolidation services offer professional representatives that provide essential advice on how to deal with creditors.

For example, many consumers believe that bankruptcy is the only option. Bankruptcy carries a heavy price, including a credit report that may be tarnished for years. With a debt advocate's professional guidance, a bankruptcy can be avoided.

In some cases, Pennsylvania consumers suffer from creditor harassment. A professional consumer debt representative can make harassment cease and provide relief from the embarrassment and stress caused by these overly-vigilant collection practices.

Debt Consolidation Services Can Reduce Credit Card Debt and Monthly Payments

Professional debt advocates offer an invaluable service to consumers. Through these services, consumers' rights are protected and they are no longer bullied by creditors. Pennsylvania residents are further empowered by the knowledge that they received an expert's counsel. Consumers then are fully aware of all available options.

These trained advocates take over communication between consumers and their creditors. The Debt Counselor's knowledge has prepared them to effectively deal with collection agencies. They are experts in the debt collection process and are fully aware of all common tactics used by creditors. As a seasoned professional, debt counselors apply learned techniques to negotiate on behalf of the consumer and persuade creditors to ease their demands.

Consumer debt counselors also fully embrace their role as an expert advocate by providing sound advice and guidance. PA consumers with debt problems receive information acquired through significant industry knowledge and training. After this consultation, individuals are now empowered; they are fully aware of the options and choices available to them.

Summary of Credit Card Debt in PA

The incredible state of debt in America has created an enormous industry for consumer debt collection. Unfortunately, the traumatic effects of our economy have only increased debt among Pennsylvania's citizens. This increase has fueled collectors to become more aggressive and intimidating towards consumers.

Consumers need an advocate to professionally represent them during their time of need. Reputable, experienced consumer credit agencies offer the expertise of their expert staff. As a representative for the individual, these debt consolidation professionals strengthen consumers in their precarious financial position. No longer defenseless, individuals are given the full knowledge they need to make informed decisions that will improve their financial health. Desperately in need of sound guidance and information, consumers' rights are now protected through the advocate's assistance.

Trained consumer debt consolidation professionals offer invaluable services to Pennsylvania citizens. By communicating with creditors, advocates apply their knowledge and experience to provide help through their expert negotiations. Seasoned experts, their negotiation skills can reduce the total debt, decrease monthly payments, and even remove tarnished marks from the consumer's credit report.