In anticipation of an increase in economic and credit turmoil, creditors and debt collectors are racing to collect as much as possible from their debtors and to minimize future losses. While many banks are cutting credit lines, raising fees, and reducing lending, creditors are also giving debt collectors more latitude to work with debtors in order to collect outstanding debts.

For example, Bank of America has made adjustments in interest rates, late fees, and even occasionally lowered loan balances, for over 700,000 of its credit card holders. Credit card companies are expecting to write off $395 billion in bad debt over the next five years, in comparison to $275 billion over the previous five years. With that in mind, there is definitely some room for negotiation.

What to ask for:

In which we learn from Consumerist commenters that “to give someone what for” is a severely dated expression unknown by today’s youth, and in which we glorify the exploits of local consumer vigilante Ed Kohler.

If you just arrived here from Consumerist, check out the highlighted links just above, or take advantages of the Quick Links on the right to browse the archives.

Also, and importantly, support Minnesota Representative Paul Gardner for this, if nothing else:

Giving The Phone Book Spammers What For | Consumerist

In an effort to sign up as many suckers students as possible, many credit card companies advertise on college campuses. They give away things like t-shirts, water bottles, and other cheap prizes, but only to students who apply for a credit card.

This access to new borrowers is worth a lot of money. Bank of America has an $8.4 million, seven-year contract with Michigan State, for example, to provide students’ personal information and on-campus access. This places the university in an awkward position: if it encourages responsible spending, its students would lose value as credit industry prey.

I think this video is once again appropriate:

Colleges Profit as Banks Market Credit Cards to Students | NYT

If you are having trouble paying your mortgage, you need to get out your financial paperwork and seek help early. If you wait until you are already missing payments, you will not have the options that are available to you while you are still paying on time.

First, get out your bills, pay stubs, and other financial records. In order to get a loan modification, most lenders require you to prove you cannot afford the mortgage you have. In doing this examination, you may find out that you have no choice: you are going to lose your home. That is a pretty harsh thing to realize, but if you find out early, you can take steps to get out with the least damage to your credit.

Second, contact your lender. Some, like Citigroup, offer early loan modification programs. Others do not offer modifications until you are 60 days or more past due. It still makes sense to get going early, though, so you can start gathering information early.

If you are offered a loan modification, make sure you understand the terms. Will your rate adjust? Will it take another 10 years to pay off your loan? If you do not understand your loan, you risk ending up in the same hot water you are in now.

Finally, if you cannot get a loan modification, you may be able to refinance your loan, instead. The Washington Post has a great chart that includes some options available to borrowers with loans from IndyMac, FHA, and HUD. If you have a loan with another lender, the only way to refinance is if you act early.

Grabbing a Loan Lifeline In Sea of Choices | Washington Post
Charting Your Course | Washington Post

(photo: Amazon)

A Christmas gift to all Caveat Emptor readers.  Oklahoma Senator Tom Coburn (R) has published a nice white paper on the worst 2008 federal spending.  Warning - this might bring your temper to a boil (it did mine) so wait until after all your festivities have completed so as to not ruin your Christmas holiday.