Credit crunch

Since the economy took a turn for the worse a lot of good people have been affected by it. Some creditors raised interest rates, charged late fees and over the limit fees. Some cut credit limits which in turn caused the debtors credit score to drop. This in turn triggered other creditors to follow suit and left many debtors paying high interest rates on other accounts as well. This tactic caused a domino effect sending the debtor into a tail spin of debt. Some of these debtors were hanging on by a thread due to job loss now their prospects of getting a job just dropped considerably due to their lower credit score. Some were then forced to default completely as the meager unemployment checks were not enough to allow them to try to do the right thing any longer. I have a solution.

Alleviating some not all of the credit crisis in this country is simple. I do realize the credit card companys don't make a profit unless they charge interest, penalties etc. But with so many credit card holders defaulting it seems to me getting back a significant portion is better than none. I think the elected persons of this country need to mandate that all delinquent credit debt holders get amnesty. Any accounts that were defaulted on or are delinquent since 2007 would be stripped of all late fees, over the limit fees and interest and placed in dormat mode. The credit limit will be restored as well. As long as the debtor makes a payment each month they will have their credit rating protected. If the debtor fails to make a payment after sixty days the account then goes back into default collection and the creditor can proceed. These accounts will be protected for a five year period. When the account is paid in full it will no longer be in the dormat mode and will be restored to the card holder. The debtor will only be in this program until they pay the credit off or the five years has ended. At the end of the five years if the card holder still owes they then would be subject to minimum payments each month and if late a fee may be charged in accordance with the credit guidelines in effect at that time.

This is a great idea as it helps people who have lost their jobs to be able to pay down some of their debt. It also helps them in their job search as a large number of potential employers use credit checks in the back ground checks of applicants.

A lot of good people will get their dignity back and will be able to hold their heads up higher when applying for jobs as they will not be labeled as dead beats.

The banks got their bail outs why shouldn't the rest of us as well.