Seeking a new intervention for financially distressed consumers, a Senate Judiciary subcommittee yesterday heard debate on a measure that would wipe out credit card debt for people in bankruptcy.
Under current law, people filing for chapters 7 and 13 bankruptcy protection are obligated to pay credit card balances along with secured debts, such as house and auto loans. The measure is aimed at punishing credit card companies that raise their interest rates to a high level and at giving consumers who may be on the verge of bankruptcy greater leverage to negotiate better deals with those lenders.
The bill, introduced in January by Sens. Sheldon Whitehouse (D-R.I.) and Richard J. Durbin (D-Ill.), is another weapon the government is wielding against exorbitant rates charged by credit card companies. New regulations issued by the Federal Reserve targeting predatory lending practices are scheduled to go into effect next year.
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Wednesday, March 25, 2009
Debating a Ceiling On Credit Card Fees
Debating a Ceiling On Credit Card Fees; Washington Post