August 26, 2009
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News: Epidemic in Credit Card Suits
Courts across the nation have seen an epidemic spreading within the system on law suits involving credit card issues. Stacks of card suits are dominating case files piled atop civil clerk's desks. Despite the fact that many analysts say the recession is near the end, these piles are a haunting sign of the ongoing recession and credit crisis not to mention the extraordinary high unemployment. All states have been affected by the credit card crisis. One hit particularly hard has been Pennsylvania. Representatives of the Northampton County court say that new piles of credit card suits arrive daily in the civil clerk's office. Court officials have gathered together to reach out to lenders in finding a viable solution to help consumers deal with their debt.
Stephen Baratta, a Northampton County Judge, has been encouraging lenders to work with credit cardholders in hashing out alternative methods for repayment. Baratta suggests that such deals could include reducing credit card interest rates and/or reducing minimum monthly payments. Judge Baratta believes that many of the cases would be satisfied by devising some sort of diversion program similar to the efforts currently underway in the home mortgage foreclosure segment. Both Northampton and Lehigh counties have been bringing together lenders and consumers to re-negotiate mortgages and save homes.
Judge Baratta would like to see Northampton County follow the lead of the Butler County Court north of Pittsburg who is currently encouraging negotiations between credit card companies and cardholders. Other court officials are not convinced becoming involved in the arbitration process is a good idea and have taken a wait and see attitude. Meanwhile, Northampton County Court card suits continue to trend upward as 42 new lawsuits were filed within a three day period last week; a 75% increase from a year ago. The case load has become almost overwhelming for most court officials. The numbers are not expected to drop in the near future since Pennsylvania's unemployment rate hit record breaking highs. Experts say the unemployed have maxed out their cards to subsidize lost wages and now at the breaking point.