Household HSBC Watch

Bankruptcy laws were changed and strengthened in 2005. Then greedy banksters, mortgage brokers, and lending companies felt safe. They could do whatever they wanted to do, since it was harder to declare bankruptcy. Nationally, the total number of bankruptcies filed in the first half of 2008, however, rose 29.2 percent, to 522,205, compared with that period in 2007, according to data released Wednesday by the Administrative Office of the U.S. Courts. Americans got used to the new law, and needed protection from shady banksters.

HSBC Finance Corp. said its credit card portfolio is under pressure, noting that delinquencies in the U.S. credit card market are up over the year-ago period due partly to an increase in bankruptcy filings amid a shaky U.S. economy. But how many credit cards in the HSBC portfolio actually belong in bankruptcy, and how many are simply unpaid because the cardholder knows they have been slapped with illegal and shady fees? Why rush to bankruptcy? Unfortunately when HSBC tries to tell someone the owe late fees for “late payments” HSBC also rushes to the credit reporting agencies with a “late 30″ entry.

In today’s economic climate the family’s other creditors may increase interest rates just because they can. But there is an interesting phenomenon. Many other creditors ignore HFC, Beneficial Finance, and HSBC Finance because they cannot be trusted to accurately report the true legal status of accounts. Don’t count on it though. There were times when HSBC Finance was self serving, dragging down a person’s credit score in order to ensure repeat business. They also thought they were immune from bankruptcy.

Nationally, bankruptcy filings by individuals or households increased 28.8 percent, to 503,749, for the six-month period ending June 30. Business filings for the six-month period totaled 18,456, a 42.1 percent increase over the first-half of 2007.

What HSBC will do next, if they haven’t done so already, is include some fine print in your contract which states “you shall exempt and reaffirm your debt if you ever file bankruptcy at any time during the life of the loan.” It is an issue that certainly will be challenged in the courts.