Word: crediteer
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...years, the typical caller at CareOne Credit, one of the biggest debt-counseling outfits in the nation, has been a woman in her 30s with a yearly family income of $30,000 to $35,000 and a credit score around 550 (that's low). In the past two months, though, the people at CareOne have noticed a shift. It's still women who usually get stuck making the call, and the age range isn't dramatically different. But credit problems are rapidly moving up the income scale. More and more calls are coming from people with family incomes...
...When TIME asked Croxson if lenders are being caught unawares by the sudden change in fortune for hordes of previously creditworthy customers, he said that a tightening of standards by credit-card issuers is actually behind many of the calls that CareOne is getting. People with four or five credit cards who thought their outstanding credit lines could see them through a tight spot are getting notice that their credit lines are being cut. With that cushion gone, they run into trouble. "Not that it's a cushion you should ever rely on to pay for living expenses," Croxson said...
...calls seeking help in January and 64,000 in February. Those numbers are up more than 15% from a year ago, Croxson said, but the really dramatic changes are in the composition of the callers. What happens after the call? The traditional solution in the credit-counseling business has been the debt-management plan, a three-to-five-year repayment schedule with the terms largely dictated by the creditors. Lots of debtors today are in so deep, though, they can't afford those terms. In that case, bankruptcy is one option - and bankruptcy filings, after dipping in the wake...
...Settlement is a renegotiation of debts that stops short of bankruptcy. Unsecured creditors such as credit-card issuers are willing to accept sharply reduced paybacks from especially troubled customers because they might not get a penny in bankruptcy court. The field has been replete with shady operators and high fees, but states are beginning to regulate it, and Croxson thinks it's headed for mainstream legitimacy (CareOne does not do debt settlement but sometimes steers clients in that direction). Big-time financial trouble is on its way to becoming a respectable middle-class phenomenon...
...automakers haven't killed the lawsuit. But they are supporting the Obama Administration's "cap and trade" initiative, which is designed to curb both the use of energy and greenhouse-gas emissions across the entire economy. For carmakers, such legislation would be mostly neutral because they earn credit for making electric vehicles and could spend it on cars that emit too much CO2. GM now notes that one-third of the Cadillac Escalades it sell are hybrids, so it would have plenty of currency. Of course, at this point Detroit is hoping for anything that doesn't have California...