Bankruptcy Blog: May 16, 2005

May 16, 2005 11:57 p.m.

Here is a list of some of the questions we’ve received from readers that should be asked at Tuesday’s hearing:

We don’t know if he’s a reader, but we feel that it can be inferred that Representative James Sensenbrenner (R-Wis), Chairman of the House Judiciary Committee, would ask credit card companies:

“Now that the risk of consumers failing to pay back their debts has been reduced, will this reduction in risk be returned to consumers in the form of lower interest rates?”


One reader has a three-part question along the same lines as Rep. Sensenbrenner:

1) “Now that Uncle Sam has transferred your risk to consumers, how much savings will you pass on to consumers, in the form of lower rates and fees?” (this one was the most common question from our readers)

2) “How much will go straight to your shareholders?”

3) “How much went to Joe Biden?”


Reader SJ asks:

“If the practices by the Credit Card industry are not predatory, why am I – who went to court for a bankruptcy in April of this year – receiving offers for credit cards when my bankruptcy has not even been fully discharged yet?”


Reader LP asks:

“Why has the gap between interest rates at which banks borrow money and the interest rates they charge credit card customers remained so large over the years?”


Reader DR asks:

“Do you feel that you have gotten your money’s worth from Congress in the passage of the recent bankruptcy bill, and are you pissed it took so long?”


Reader KM asks:

“Why are banks allowed to apply your payments in order of interest rate, such that credit card loan-types with the highest rate are paid off last regardless of when it was borrowed?”


Reader DN asks:

“Would you (the credit card companies) be willing under any circumstances short of legislation to ever place information on statements about how long it would take consumers to pay off their debts making only the minimum payments?”


Reader JA asks:

“Why are you taking advantage of teenagers in high school and college and then suing their parents when they can’t pay, without first asking for their cosigning on the account? Isn’t this dishonest? “


One observer asks credit card companies:

“How do you justify hitting consumers struggling to pay their balances with $35 late fees and 30% “penalty” interest rates that might force them over the financial brink into bankruptcy? If the goal is to protect the company’s financial commitment, why not just cut off their credit and help keep them solvent?”

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