Big Economic Changes in October of 2005

This October will be one to remember.The San Diego Reader has some rather interesting information:

Presently, state law prevents banks from going after a person's assets in a home foreclosure. However, some people, often unwittingly, waive this protection when they refinance. Under the new law, it will be harder for those who have waived to keep the lenders at bay.

Under the new law, bankruptcy attorneys must certify clients' financial statements to the court and will be held responsible if statements are false. "This will raise lawyers' fees," says Michelle White, University of California, San Diego, economist.

Next month, people who have held a credit card for some time should get a surprise: each month, they will have to pay 4 percent of the outstanding balance on the card, not 2 percent. This move was dictated by the federal government's comptroller of the currency in 2003. The phase-in for new customers began in the summer, and October is the big month for existing customers. It's not small change. Almost 40 percent of credit-card holders pay only the minimum balance, according to Cardweb.com.

The average household credit-card balance is around $9000, according to Boston's Babson Capital. Previously, families paid a minimum of $180 a month. Now, they will have to pay $360 each month.

We will post more on the coming slowdown.