It is estimated that the average American has about 13 different credit cards in his hands, and the total amount of debt for them ranges from 8 to 9.5 thousand dollars.
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It is therefore not surprising that the amount of overdue debt and the number of debtors in the United States are constantly growing. This year, only credit cards owed 181 million Americans – almost 20 million more than in 2008, and the total amount of debt amounts to hundreds of billions of dollars. Return of the money in the United States are engaged in collectors.
It is known that in 2009 alone, more than $ 20 billion in interest was charged on the debts of unsuccessful recipients of bank loans in America, not even including a mortgage. Indeed, in the event of delay in repayment of a loan taken in American banks, at first, the debtor begins to “drip” mad by the US standards “default interest” – 28.9 percent per annum.
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By law, fines, penalties and higher interest are charged on the overdue loan only for the first three months, and starting from the 91st day, the proceedings with an irresponsible borrower are usually assigned to a private collection agency. Loans for those with bad credit (Virginia): this is where the fun begins. Collectors start “bombing” the debtor by calling on the home phone, sending letters and in every possible way reminding of the immediate need to return the debt. However, in accordance with the law “On the practice of honest debt collection” adopted in the United States in 1978, collectors have to do this according to strict rules. In particular, “bad debt collectors” in America are prohibited from disturbing their insolvent clients in the early and late hours, threatening with arrest and using harsh words, calling unfair debtors for work and providing them with incorrect information. Today in the US there are about 6.5 thousand collection agencies, whose business flourished before the financial crisis began.
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Collecting portfolios of “bad debts” from banks, insurance companies and utility providers, for 10 percent of the amount, or getting 20-25 percent of the returned debt, collectors managed to earn huge sums. However, since the beginning of the economic decline in America, these organizations are suffering losses – many Americans simply have nothing to pay. So, compared with 2007, when collectors managed to hammer out more than 40 billion dollars of debt from Americans, in 2008 the profits of many collection agencies fell by 30-80 percent.
What threatens an American who does not return a bank loan, except for “sweet” communication with collectors? The main and most unpleasant result will be a stain on the credit history that all US residents have.
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In America, there are three main bureaus, which punctually gather information about who, when and how much gave you a loan, and how carefully you paid the money. And if it was not possible to pay with your bank on time, it will certainly be reflected in the individual credit rating. If the conflict with the bank reached the court, then it will be impossible to take another loan for seven years, and after this time the percentage for which the loan will still be issued will be very high. Once in the “debt trap”, from 1 to 2 million a year, Americans prefer to declare themselves bankrupt – the benefit of this possibility for individuals is provided by the US bankruptcy law. Such a step threatens the loss of property by a court decision, but often it is much more profitable than paying money to banks. In addition, it is possible to “restructure” outstanding debt for several years to come.