Many Arkansas residents slowed their spending following the financial crisis in 2008, but the last few months have seen a small increase in overall credit card usage, According to the Federal Reserve, as of July 2014, outstanding consumer debt, which includes student loans and credit cards but not mortgages, totaled $3.24 trillion. The amount of revolving debt, mainly from credit cards, was $880.5 billion.
The Bankruptcy Code is a uniform federal law that administers bankruptcy cases and is used to provide debtors with a fresh financial position. The federal rules and regulations of each of the country's bankruptcy courts, including the U.S. Bankruptcy Court for the Eastern and Western Districts of Arkansas, outline the formal procedures that handle individual debt issues.
The Fair Debt Collection Practices Act, which is enforced by the Federal Trade Commission, protects consumers and limits the behaviors of companies that collect debts. The act applies to individuals who hold a variety of debts, including auto loans, mortgages and credit card accounts, and restricts the actions of persons who regularly collect debts that are owed to others.
Arkansas individuals who are struggling with credit card debt have a number of options for reducing or getting rid of that debt. They may be able to pay it off, but that is not always an available option. Those who can pay more than the minimum amount and who have debts on more than one card should apply most of their payment to the high-interest card first while only paying the minimum on the other cards. Another option for reducing credit card debt is to switch as much of the debt as possible to a card with a low introductory rate. Individuals should be cautious with this option, however, as after a certain period of time, the rate jumps back up and may be high.
Arkansas residents may be relieved to hear that medical debt will no longer have as large a negative impact on their credit ratings, but this type of debt is still a huge problem for many people. According to the Kaiser Family Foundation, one-third of Americans struggle to pay medical bills, and a study published in the The American Journal of Medicine in 2009 states that the leading reason that people file for bankruptcy is medical debt.
As many Arkansas residents know, credit cards are great to have on hand whenever the urgent need for extra cash arises. On the other hand, credit cards can also cause problems such as incorrect charges that may lead to harassing calls from collection agencies. Credit card users, however, have certain rights regarding verifying and disputing credit card debt that may assist them as they deal with the problem.