The U.S. Senate is considering a credit card reform bill this week which is intended to protect consumers from retroactive rate hikes, which would not be regulated under new rules issued by the Federal Reserve, and other abusive, confusing, and deceptive practices employed by credit card companies.

Among other provisions, the Credit Card Accountability, Responsibility, and Disclosure Act would:
· Protect consumers from arbitrary interest rate, fee and finance charge increases and prohibit universal default on existing balances
· Prohibit interest charges on paid-off balances from previous billing cycle (also known as a double-cycle billing ban)
· Require payments to be applied first to the credit card balance with the highest interest rate
· Protect students and other young consumers from aggressive credit card solicitations
· Ensure that payments are fairly allocated to the account with the highest interest rate first
· Require greater disclosure of rates, terms and billing details by credit card companies
· Establish tougher penalties for companies that violate the law

Often, our clients who are considering Chapter 7 or Chapter 13 bankruptcy due to credit card debt are unaware of the total amount of their debt due to the fact that there have been so many changes in the terms of their card agreements. Especially in Chapter 13 bankruptcy cases where debtors may be required to repay a portion or all of their credit card debt, the amount of their debt is important.

Bankruptcy may provide debtors in Chapter 13 bankruptcy cases the opportunity to litigate with their creditors regarding the amount of debt owed. As with all legal matters, it is important for anyone considering these choices to consult with an experienced attorney about the specific circumstances in their case.

A position paper prepared by the National Consumer Law Association may be found at http://www.nclc.org/issues/credit_cards/content/30DaysLate_Analysis042709.pdf

You may also review a full summary of the bill at http://banking.senate.gov/public/_files/051109_CARDActSummary.pdf