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Managing Holiday Credit, Debt and Bankruptcy in Today's Economy
MOUNTAIN VIEW, Calif., Nov. 4, 2003 – Bankruptcy experts are worried that rising consumer confidence and the ease of obtaining multiple credit cards means many holiday shoppers will take on dangerous levels of debt in the name of giving generously, according to the legal Web site FindLaw ( http://www.findlaw.com ).
Young people may be particularly susceptible to the dangers of credit and debt. "The siren song of advertisers today is 'buy it now,'" says retired federal bankruptcy judge William L. Norton, sponsor of the Norton Institutes on Bankruptcy Law and editor of Norton Bankruptcy Law and Practice, 2d, and the monthly newsletter Norton Bankruptcy Law Advisor, published by West. "Advertising heavily advocates buying on interest and people in their teens and twenties are getting in over their heads by accumulating several relatively small payments that quickly add up to overwhelming debt."
And if consumers begin maxing out their credit card limits because of anticipation of an improving economy, they've already violated one of the first principles of responsible credit management. Norton says that counting on an economic recovery when racking up debt is a dangerous practice.
FindLaw offers some advice for consumers to help them shop and use their credit cards responsibly this holiday season:
Be realistic, determine how much you can afford, and don't allow yourself to go over budget. FindLaw suggests even bringing along somebody else when shopping to act as a voice of reason to avoid overspending.
A rule of thumb: don't buy anything on credit, for Christmas or otherwise, that you can't pay off in 45 days. Remember that carrying a credit balance may mean paying hundreds of dollars in interest before it's paid off.
Prices tend to rise as Christmas approaches, so get out there early, research products and compare prices, which studies have shown can fluctuate up to 50% for identical products in the same area.
Receipts will be necessary if the recipient of your gift needs to return or exchange it, and you should carefully compare those receipts to your credit card statement when it arrives.
Educate yourself about your rights as a credit card holder and contest any charges you believe are inaccurate. Lenders, such as credit card companies, are required to investigate complaints of fraudulent charges and report back to the borrower.
Free legal information Web sites such as FindLaw ( http://www.findlaw.com ) offer consumers information about personal finance and credit. And if push comes to shove, FindLaw can also assist consumers with finding a lawyer.
This holiday season, be smart about how you use your credit cards. You want those people in your driveway to be singing Christmas carols, not repossessing your car.
About FindLaw
FindLaw (www.findlaw.com) is the leading provider of online legal information and solutions for the legal community, businesses and individuals. The FindLaw Internet portal is the highest-trafficked legal Web site, according to leading independent Internet-traffic-monitoring services. The site provides comprehensive, plain-English legal information to businesses and individuals. These resources include West Legal Directory¨, the Internet's largest directory of lawyers and legal professionals. FindLaw also offers comprehensive information, resources and services for law practice and legal career development, including free case law, an online career center, breaking legal news, newsletters, message boards, service directories, continuing legal education and legal search tools. In addition, FindLaw provides access to tools and services that help connect legal professionals with potential clients. FindLaw is a business with The Thomson Corporation (NYSE: TOC; TSX: TOC).
About The Thomson Corporation
The Thomson Corporation (www.thomson.com), with 2002 revenues from continuing operations of $7.5 billion, is a global leader in providing integrated information solutions to business and professional customers. Thomson provides value-added information, software tools and applications to more than 20 million users in the fields of law, tax, accounting, financial services, higher education, reference information, corporate training and assessment, scientific research and healthcare. With operational headquarters in Stamford, Conn., Thomson has approximately 43,000 employees and provides services in approximately 130 countries. The Corporation's common shares are listed on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC).