Little known secret: credit card companies are slavering to lend money to subprime borrowers after they are discharged from bankruptcy. They know that the borrowers are inveterate credit abusers. They know that the borrowers are too foolish to care that their interest rates will approach 30% (I kid you not.) And, most importantly, they know that the borrowers can't declare bankruptcy again for 6 years (under the old law)(8 years under the new law.)
So, they're putting their fangs into them as fast as they can.
Even though it's inevitable that the borrower will fall back into the trap of minimum payments, with 30% interest and various penalties, the borrower will NEVER quit paying.
When Tony Soprano does it, he goes to jail. When Capitol One does it, it's a wonderful racket and completely legal.
I have one client who paid off his credit cards completely in May 2003, and by November 2004, owed $80,000, yet all he charged was restaurants and groceries. He's old, mildly demented, and neglected to make his payments. It's horrifying. But legal. |
