Truth in Lending Act

Back on April 20, 2005, President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act. As of October 17, 2005, the Act will go into effect. Bankruptcy is confusing enough, and now there are a lot of changes to regard before you file for bankruptcy. We will highlight, in two parts, some of the more important changes to help you better understand them.

We begin with the amendments to the Truth in Lending Act that deals with the responsibilities of credit and charge card companies.

Certain disclosures will now come with monthly billing statements. They will include the due date and the date that late fees will be assessed, and for how much. Statements will also include a warning box. The warning box will inform customers the dangers of only making the minimum monthly payments, and the estimated cost and length of time it will take to erase the debt. This may be an example of what you might see on your statement:

There are new regulations when a company tries to get you to apply for a credit card. Some of the application’s fine print will be easier to read and understand. There will be detailed explanations on the introductory rates and disclosure of any rates that will follow it.

If you are offered a credit card that includes a discounted or low introductory rate it must include the following disclosures: 1.) The term “introductory” must be in immediate proximity to each listing of the temporary annual percentage rate. (That way you know that the low rate is only temporary.) 2.) The length of the introductory rate and the amount of the rate increase that follows the introductory period. (Basically, they are disclosing how long the introductory rate will last and how much the rate will be after the introductory rate period. So, if you have an introductory rate of 4% for the first year they have to disclose that it will jump up to 10% after that year.)

These provisions are to help protect consumers by disclosing as much information possible to help make better decisions on what lender to choose.

We will continue our article on page four with more explanations of the amendments to bankruptcy terms and qualifications.

This information is not provided, or to be taken as legal advice. If considering Bankruptcy it is important to contact an attorney for any questions. The bankruptcy reform contains many provisions and circumstances, depending on each individual and the state that they reside in.

Pioneer Credit Counseling is a bonded, non-profit credit counseling agency offering debt management programs, financial counseling, bankruptcy counseling and housing counseling nationwide. Call our friendly counselors today at 800-888-1596 or visit

Our accredited credit counselors will help you take control of your financial life and get out of debt faster than you can on your own. We offer a debt management program that will stop the collections calls, lower your monthly payment and provide you peace of mind. Our pre and post bankruptcy counselors provide an easy process for you so you can focus on rebuilding your financial being.

It is our policy at Pioneer Credit Counseling not only to help people get out of debt, but also educate in sound budgeting practices.

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