Bankruptcy & Foreclosures

With the start of a fresh year on the horizon, the air is alive with talk of resolutions. Some of us hope to ditch bad habits while others hope to get some improvements started. It’s a given that many Americans use this time of year to resolve to live healthier but according to a recent study conducted by Countrywide Financial Corp’s Bank division, the tides are turning. Their research, which included interviewing some one thousand adults determined that 67 % of participants placed financial fitness at the top of their resolution list. Comparatively only 57% reported 2008 as a year to become more physically fit.

With 2007 shaping up to be a year remembered for a mess in the sub-prime lending industry, a shaky mortgage market, record-high oil prices, massive toy recalls, and a decreasing dollar bill value, it should really come as no surprise that many individuals are hoping to improve things for 2008.

The good news is that analysts are already predicting an improvement in the domestic economy for the upcoming year. We certainly hope so, but only time will tell.

The credit card companies are all too aware of the disturbing condition that takes place this time of year: Procrastination. Believe it or not surveys suggest that 1 in 5 men still hasn’t even started his Christmas shopping yet. While I’m not the exactly the poster child of motivation, I am pleased to report that I do not fall into that statistic.

Taking a look at the Nation Retail Federation’s (NRF) First Holiday Survey, US consumers plan to spend $816.69 on holiday related shopping.

Although disturbing in its own right, here’s something to consider. Paying the minimum payment on this balance (let’s say $15.82 per month) it would take 100 months or 8 and a half years to pay this back with a total $765.31 worth of interest charges.

Worse yet is that studies have proven that consumers are less cautious with their spending habits as the amount of time left to shop decreases. Considering that we are now five days away from Christmas, credit cards will certainly play a role in spontaneous (last minute) purchasing.

A final stat to leave you with is that 24% of holiday shoppers will not finish until December 23rd and 10% will push it right to Christmas Eve.

Here’s the scenario: After years of paying your bills on time, you overlook a bill that ends up going into collection. By the time you realize the error, a negative entry has been logged onto your credit report. It happens even to the most organized of us.

The question I often encounter after these situations is: “How long will this blemish stay on my credit report?”

Here’s the bad news: A 30-day late payment will likely stain your credit for seven long years. As will defaulted student loan payments, foreclosures, or law suit filings.

Bankruptcy stays on for ten years and unpaid taxation leans stick with you for fifteen years!

What’s worse is that if these negative entries aren’t erroneous, there is very little a consumer can do to get them to go away. The best advice I can offer if this happens to you is to pay everything else on time so that the negative entry stands out as a single-mistake rather than a pattern of your payment practices.