September 13, 2010
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News: One County Dealing With The Credit Card Crunch
New procedures on how one Pennsylvania County files civil lawsuits has made tracking the number of credit cardholders being sued for non-payment by their lender possible. New rules set down by the Administrative Office of Pennsylvania Courts mandate that plaintiffs fill out a form that describes the purpose of the lawsuit. The Lancaster County courthouse was able to see that credit card debt is a troublesome thing with residents. According to court documents, over 400 civil lawsuits were filed over the past two months against Lancaster residents. The suit were filed by a number of credit card companies including Capital One, Citibank, and Discover Card for nonpayment of debt.
During the month of July, 218 suits were filed against credit cardholders. However, that number fell to 210 during August. The slight drop would be encouraging except for the fact that during June, there were only 63 suits filed. A spokesperson said the low number in June could possibly be from an error in coding rather than actual numbers since it was the first month the new tracking system took place. County representatives have said that the county's high unemployment rate has made it difficult for residents to meet expenses. As a result, many have made paying credit card bills their last priority.
Lawsuits resulting from credit cardholders' lack of payment have not always been easily identified because a large portion of them are filed by collection agencies rather than the lender itself. Lancaster joins the rest of the nation as it struggles with high card defaults and unemployment. However, on a positive note, recent reports by the top card issuers indicate that defaults have begun to trend down. On the other hand, unemployment continues to be a major problem. Historically, card defaults mirror unemployment and if the trend continues, it would be a sign that it will be some time before the economy returns to any normalcy.