:)
Posted on 10/03/2005 4:48:36 AM PDT by thinking4me
A young couple from Cortlandt Manor, N.Y., told a woeful tale of lost jobs, a lost home in Florida, a deeply troubled 12-year-old, and a kiting operation that kept all their credit-card payments up to date. "I had to take money from the Optima card to pay the bill on the MBNA," the wife said. "But I always paid." With $258,685 on more than 60 cards, they finally filed for bankruptcy....... Bankruptcy lawyers say that this does not mean that homeowners have been more prudent than renters. "Two or three years ago, mortgage companies were giving money to anyone," Mr. Berger said. "They didn't care whether they could afford it, just that they had a house. Now I'm seeing all these people who never had the income to pay these loans in trouble."
(Excerpt) Read more at nytimes.com ...
People are blamed when they pile on debt and accused of being irresponsible.... BUT WHAT IF IT IS THE BANKS/CREDIT CARD AGENCIES which are the culprits because they should N-O-T allow people to pile on debts beyond their means IN THE FIRST PLACE: ARE THEY STUPID OR DO THEY HAVE A PLAN TO KEEP US POOR AND STUPID?
also see: The Category 3 Storm Named Fannie Mae Could Turn Into Hurricane | Oct 2, 2005
And with its stock down 40 percent this year, despite the residential real estate boom (although the stock did rebound a bit after Wednesday's carnage), one has to wonder what ails Fannie, and what is she trying to tell us?..... more http://www.nypost.com/business/54497.htm
Fannie hired 1500 accountants to fix the mess... err read instead to cook the books further.
The Founding Fathers were all correct, I am afraid: central banking is a plague.
To support this, in the article they interviewed a man who took out a $20,000 equity line to "pay off a scary credit card debt" and "take a small vacation". Obviously this man does not realize the bank will soon own all that he thought he did.
There is a booming business of "no credit - bad credit" refinancing. I would nto be surprised to see that if you connect the dots you will find the credit card companies reap some benefit on foreclosures due to faulty equity lines.
Seven years of bad credit is cheap consequences to simply walk away.
And I generally agree, let the banks that made these loans take the loss. The consequences should begin there.
It is beyond my imagination to borrow $258k on credit cards...
Wow, too early for me to post...fingers don;t work. Better take out a loan and get that fixed.
Sorry i dont buy it. You live within your means - period end of story.
I have a mortgage, I pay it every month
I pay all my bills on time and put a little away every month just in case.
It is NOT that hard to do. When i get an increase in credit i say whoopiedoo and still spend WITHIN MY MEANS
If people lived within their means and did not buy the second SUV, three big screens and GOD knows what other toys they WANT but cannot AFFORD this type of thing would not happen
Being debt free, except for the mortgage, is a greater comfort than a dozen cool high status doo-dads.
:)
"Being debt free, except for the mortgage, is a greater comfort than a dozen cool high status doo-dads."
exactly. when i was in college i was amazed at all my peers (evidently infinitely more immature than i was) sign up for credit cards then run out and rack up huge amounts on them. I signed up sure but only used them here and there and paid off every month without carrying a balance. I knew i would have student loans among other expenses when getting out but these kids either were not taught or just did not care about consequences. Again i have NO SYMPATHY for people who get that badly into debt unless do to an illness or death in the family. This is preventable due to Personal responsibility
And in a few years I won't even have the mortgage.
Personal responsibility takes a back seat to corporate greed for you? These companies exist for the sole purpose of lending money. The terms and conditions are always clear if you chose to read the contract. Anyone who digs himself so deep a hole (with the exception of folks with serious problems, ie, health and no alternative) has no one to blame but himself.
Down to about 7 myself.
frankly, I am jealous of all those people with the fancy vacations and fancy lifestyles and I wonder how they afford it all....
apprently, most can not.....
I'd have agreed with you years ago, when banks did not lend to the uncreditworthy. But since I started seeing booths at college registrations hawking credit cards to 18-yr-olds who have NO INCOME--they know they are creating a bad situation, and shouldn't be allowed to use our courtrooms to "break the kneecaps" of deadbeats. Our courts are the enforcers of these bad lending practices. Why should the taxpayer support bad lending practices?
When I got out of college I went into business for myself. I experienced almost a decade of being in debt both personally and professionally. It was small potatoes compared to many folks, but it was like a 10 year toothache to me. Money is a good servant but a very bad master.
"It is beyond my imagination to borrow $258k on credit cards..."
After working in New York City in the 1980's I find it quite plausible. Mind you this was back when there was the yuppie image obsession. One engineer I worked with bragged about have $100K of non-mortgage debt, mostly for "keeping up appearances". That was $100K of 1985 dollars, don't know what it would be now adjusted for inflation. During that time there were a number of "success" books being published pushing the notion of an image of success was necessary (and going on to describe such an image), and justifying going heavily into debt to pursue it. One steel company actually viewed an employee's golf club membership more important than what he contributed to the bottom line. This was when the unofficial part of the job performance review considered your address, your car, your out of work activities (golf good, running marathons bad), and of course whether or not you had the right high maintenance wife.
"When a family uses its home like a piggy bank and then a job loss, a divorce or an increase in the adjustable-rate mortgage leaves them unable to make the payments, the family is out of options," Professor Warren said. "That's true before and after Oct. 17. Borrowing against a home leaves a family with the fewest possible options when something goes wrong."
"After Oct. 17, bankruptcy gets harder for everyone - more expensive, more traps, less coverage," she said. "And that means more families are set up to lose their homes."
More signs of the housing market "pop" - which, at this rate and consequence, could be just a flat market for a few years...
However, these are unsecured debts. Banks charge 21% precisely because if the user defaults, they have no recourse. The higher rates compensate the lenders for this risk. The new bankruptcy bill changes that. I wonder if we will see commensurate lowering of the rates they charge? Sorry, but I think the new law is a mistake.
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