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Bankruptcy: Reasons stay the same, but number of filings have nearly doubled in 10 years
Great Falls Tribune ^

Posted on 02/09/2003 8:55:56 AM PST by RCW2001

Edited on 05/07/2004 7:33:59 PM PDT by Jim Robinson. [history]

About one of every 240 Montanans turned to bankruptcy last year as a life preserver of sorts -- the only thing keeping them from drowning in a sea of debt.

Bankruptcy filings in the Treasure State totaled 3,779 in 2002, just 73 shy of the record-breaking number in 2001.


(Excerpt) Read more at greatfallstribune.com ...


TOPICS: Business/Economy; Extended News; US: Montana
KEYWORDS:

1 posted on 02/09/2003 8:55:56 AM PST by RCW2001
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To: RCW2001
I agree with the article that at least one cause of the problem is that credit is so easy to get. A guy who makes minimum wage can live his life on credit cards for quite a while.

In the last few years, I've seen a few of my neighbors who have 7-Eleven-type jobs having big screen TVs and new furniture delivered to the house. Credit cards are a means to instant gratification but can really bite you later.

2 posted on 02/09/2003 9:03:23 AM PST by Excuse_My_Bellicosity
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To: RCW2001
When your outgo exceeds your income, then your upkeep becomes your downfall.
3 posted on 02/09/2003 9:05:20 AM PST by Search4Truth ("Rebellion to tyrants, is obedience to God"-Thomas Jefferson.)
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To: RCW2001
Bump for later read.
4 posted on 02/09/2003 9:06:20 AM PST by Larry Lucido
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To: RCW2001
The reasons Montanans file for bankruptcy have changed little over the years -- the loss of a job, unmanageable credit card debt, gambling debts, lack of health insurance combined with catastrophic medical issues -- but overall, statewide filings have doubled since 1990.

My advice to all those with credit card or even home equity debt is to get out from under it as quick as you can. It will be the best thing you ever do for yourself. Words cannot describe the feeling of being (other than the primary mortgage) debt-free.

Of course, you still need to manage your money and live not at your means but below your means. Living below your means is the only sure-fire way to get ahead in America. My wife and I put away the money we used to spend on car payments, credit card payments and home equity line payments. As a result, we have ready cash for all of life's "little" emergencies that most people go into debt to cover.

I know people who have enviable incomes but they are in debt up to their ears. If they ever missed a paycheck or two, they'd be facing a financial disaster. That's not living affluently, that living in slavery!

5 posted on 02/09/2003 9:07:13 AM PST by SamAdams76 ('Faithless is he that says farewell when the road darkens')
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To: RCW2001
Banking institutions must do their job just as people must be responsible for their debts. When I see banks trying to hawk credit cards to jobless college students, these banks are not taking responsibility for investigating creditworthiness. Why should the courts bail them out? They are just as bad as the deadbeats! Let them eat their own bad decisions, rather than tangle up the courts. Stop extending credit--!
6 posted on 02/09/2003 9:07:24 AM PST by Mamzelle
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To: RCW2001
I agree with the article that at least one cause of the problem is that credit is so easy to get.

I should probably rephrase that. What I really meant is that credit has gotten easier to get for people who choose to be irresponsible with it (emphasis on people who are irresponsible). It's a lot easier for them to dig themselves a hole now.

7 posted on 02/09/2003 9:12:27 AM PST by Excuse_My_Bellicosity
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To: Mamzelle
When I was in college, I couldn't believe the number of credit card companies on campus pushing their credit cards on anybody and everybody. It was around all the time. They were always giving away free T-shirts, hats, frisbees, and stuff like that. I would always fill out their credit applications with bogus information so that I could get the free junk, but I stayed the hell away from the credit cards. That's the last thing I needed as a dirt-poor college student.
8 posted on 02/09/2003 9:17:39 AM PST by Excuse_My_Bellicosity
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To: Mamzelle
Stop extending credit--!

The problem is the nature of our money. Our money is credit. Stop extending credit and there will be less (or no) money. Less money means fewer purchases of non essential goods. Fewer purchases of non essential goods means fewer jobs. Fewer jobs means higher permanent unemployment. Higher permanent unmeployment means higher welfare. Higher welfare means higher taxes to pay for it. Higher taxes means less money to purchase non essential goods. Fewer purchases means fewer jobs.

And that's not even thinking about things like interest and principle payments on the national debt.

9 posted on 02/09/2003 9:25:06 AM PST by templar
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To: templar
I know someone who was receiving new credit card offers a month after his bankruptcy was discharged. The banks extend the credit to the unworthy to enslave them financially and charge exorbitant interest rates on the debt. They make a ton of money. Now they want to make it tougher for the debtor to escape this financial bondage by rewriting the bankruptcy code in favor of the banks. That is shameful, and I hope
Congress wont cave in to their pressure. If the banks want to write off less debt, dont extend credit to a guy making $10/hour. Apply some rational standards as to who qualifies for credit cards.
10 posted on 02/09/2003 9:42:23 AM PST by Astronaut
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To: Astronaut
The whole system is out of control. I don't see a solution that doesn't entail a lot of pain, grief, and suffering. That 10 buck an hour guy has kept some 20 or 30 dollar an hour guy employed by spending on his credit card. Cut him off from credit and the people his credit has been employing will be out of work. Keep him making payments he can't afford and the result is the same since he can't buy anything new with new credit. From my point of view (and I'm not anything close to an economist so it's not really valid) it looks like disaster somewhere down the road.
11 posted on 02/09/2003 9:49:47 AM PST by templar
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To: Mamzelle
When I see banks trying to hawk credit cards to jobless college students, these banks are not taking responsibility for investigating creditworthiness.

You are right. Credit cards were once not so easily obtained. You had to have impeccable credit. As well, it was not customary to "carry debt" from month to month. Most people paid the bill off each month. In fact, many credit card companies (such as American Express) mandated it. People didn't see credit cards as a device to obtain good and services they didn't have the money for. They saw credit cards as a convenient way to pay for things so that they didn't have to carry lots of cash around with them all the time.

As recently as the 1970s, having a credit card was a badge of honor. Flashing a credit card announced to the world that you had arrived as a responsible and credit-worthy citizen. After all, credit cards weren't issued to just anybody.

Somewhere along the way, the credit card companies realized that they could make much, much more money by encouraging their customers to "carry over" balances so that interest could be charged. Even American Express now allows their customers to carry over balances. They lure you in with a "low, low rate" so that they can jack it up the first time you are late with a payment (or when they think you aren't noticing).

All of that is well and good. But it's time that the credit card companies were made to assume some responsibility for issuing "easy credit" to the financially clueless and irresponsible. Most of the people declaring bankruptcy should never have had a credit card in the first place. BTW, I'm not making excuses for those who don't pay their debts. I'm just saying that I don't want to see these credit card companies bailed out for making high-risk loans.

12 posted on 02/09/2003 9:55:00 AM PST by SamAdams76 ('Faithless is he that says farewell when the road darkens')
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To: SamAdams76
I know people who have enviable incomes but they are in debt up to their ears. If they ever missed a paycheck or two, they'd be facing a financial disaster. That's not living affluently, that living in slavery!

I had a summer job in the collection department at a bank 20+ years ago. I was surprised at the number of influential people that had trouble paying their bills.

13 posted on 02/09/2003 10:31:20 AM PST by EVO X
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To: SamAdams76
Until recently, I was essentially unemployed for almost two years. I had reserved enough money to make it through the dry spell. I have begun working again at a good salary. The monthly average of creditors offering credit never varied. I must get, at least, a half dozen offers a week (I never applied to one offer). I have known a fellow up in WV for 15 years. He declares bankrupcy every seven years like clockwork. He doesn't seem to lose anything. Immediately after filing he is inundated with proffers for credit. It doesn't bode well for our future that banks are pulling this crap.
14 posted on 02/09/2003 10:43:09 AM PST by Movemout (Why should we want to arm a Dillo? What is a Dillo?)
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To: Movemout
I have known a fellow up in WV for 15 years. He declares bankrupcy every seven years like clockwork. He doesn't seem to lose anything. Immediately after filing he is inundated with proffers for credit. It doesn't bode well for our future that banks are pulling this crap.

I have a family member who declared bankruptcy about 10 years ago. Always had the best clothes, fancy car and extravagant lifestyle. Within a few years, he was back to his old lifestyle again, running up as much debt as he can. Now his kids are coming close to college age and due to his lack of financial assets, he will probably qualify for financial aid to put his kids through college.

Meanwhile, I'm trying to figure out how to get my kids through college without wiping out my life's savings. Due to the fact that I lived responsibly and was able to put money aside, I will not qualify for any student aid for my kids whatsoever.

Makes you wonder whether you and I are the real suckers, don't it?

15 posted on 02/09/2003 10:50:56 AM PST by SamAdams76 ('Faithless is he that says farewell when the road darkens')
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To: RCW2001; All
Someone I know recently confided to me that that they are $65K in credit card debt. Can someone here calculate a ballpark minimum payment for that amount?
16 posted on 02/09/2003 10:53:20 AM PST by Rebelbase
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To: SamAdams76
"Makes you wonder whether you and I are the real suckers, don't it? "

This reminds me of something else. I knew two brothers up in WV, one is dead now. They both suffered from a low IQ. They were sent a check every month from the state, being disabled and all. They used their checks to buy four wheelers, rifles, and whatever their little pea-pickin' hearts desired. They lived with Momma and had no bills. I have often wondered, while slogging it out day in and day out, whether their life of gadding about was superior to my life of grinding my nose away. I still wonder.

17 posted on 02/09/2003 11:02:46 AM PST by Movemout (Why should we want to arm a Dillo? What is a Dillo?)
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To: Rebelbase
It should be close to $2,000/month. Ballpark.
18 posted on 02/09/2003 11:04:33 AM PST by Movemout (Why should we want to arm a Dillo? What is a Dillo?)
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To: Movemout
I'm with you. My family is from Alabama and my parents have a 20-acre spread down there. Sometimes I wonder why I just don't quit my job, sell my house, and move my family down there. With my savings and what I could get for my house here in Massachusetts, I could pay cash for a double-wide trailer, set it down on a piece of my parent's land and live off what is left over for the rest of my life.

Someday, that might happen!

19 posted on 02/09/2003 11:12:54 AM PST by SamAdams76 ('Faithless is he that says farewell when the road darkens')
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To: Rebelbase
$1,950 per month?
20 posted on 02/09/2003 11:22:09 AM PST by Brian Allen (This above all -- to thine own self be true)
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To: Rebelbase
Someone I know recently confided to me that that they are $65K in credit card debt. Can someone here calculate a ballpark minimum payment for that amount?

Depends on the interest rate. Assuming the commonly used 18% rate, that person would need to come up with $1,625 for a minimum payment with a balance of $65,000. And if that person insisted on making only the minimum payment, it would take 48 years to pay it off, and he would end up paying about $100,000 in interest (in addition to the $65,000 principal). That's assuming, of course, that he never used a credit card again!

There is a calculator here that will figure out all the gory details for you!

21 posted on 02/09/2003 11:22:35 AM PST by SamAdams76 ('Faithless is he that says farewell when the road darkens')
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To: templar
Your comment about getting out of debt without pain and suffering. I am in the process of paying off my credit cards and what I do is that when I spend money I only spend paper money and pocket the change. At the end of the month I wrap the change and run down to the bank and deposit it in my checking account; then I write a check to the credit card company that I am trying to get out of my life. It is working well.
22 posted on 02/09/2003 11:45:18 AM PST by peter the great
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To: RCW2001
There is nothing wrong with going bankrupt.

Lots of very famous and admired people have went bankrupt. We enjoy lots of products which came to into being only because many inventors went bankrupt, and were able to start over again.

Davy Crockett, Rembrandt, Mark Twain, H. J. Heinz(ketchup would not even have been invented if Heinz did not go bankrupt), Milton Hershey(chocolate), Henry Ford(we would not have Ford cars if Ford did not go bankrupt), P. T. Barnum(we would not have circuses if he had not gone bankrupt), Debbie Reynolds, Burt Reynolds, Jerry Lee Lewis, Wayne Newton, Mickey Rooney, Donald Trump, the Bass brothers, etc.

Since we no longer have "The Year of Jubliee", bankrupcy is the closest we have to the bibilical principal of canceling debt every so often.

I also have no sypmathy for banks, and their practices.

23 posted on 02/09/2003 11:51:38 AM PST by waterstraat
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To: templar
You nailed it. I beleive that is one reason consumer spending is down, is that so many have tapped out their credit and its slowing down the economy.
24 posted on 02/09/2003 1:20:09 PM PST by L`enn
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To: Rebelbase
The sad thing is at that sum they will pay it forever. An affordable minimum monthly payment probably only pays the interest and the principal never goes down.
25 posted on 02/09/2003 1:21:55 PM PST by L`enn
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To: SamAdams76
re: I'm just saying that I don't want to see these credit card companies bailed out for making high-risk loans. )))

Exactly. The credit card companies, who take no trouble to examine credit worthiness, should get no new breaks from the legislature in bankruptcy law. Many parents of college students would rather they not have credit cards, but because they are over 18 there is nothing the parents can do to prevent getting the cards--at least the companies can't go after the parents!

26 posted on 02/09/2003 2:16:13 PM PST by Mamzelle
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To: waterstraat
I can't believe your would equate cancelling debt 'every so often' as a biblical principle. Filing for bankruptcy is in direct opposition to the Biblical priniciples I know. In my personal opinion, filing for bankruptcy instead of paying off personal debts is the same as stealing...since the rest of consumers must pay for your irresponsibility. You are one scary person.....and certainly do not know your Bible.
27 posted on 02/09/2003 2:28:07 PM PST by Faithfull
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To: SamAdams76
Makes you wonder whether you and I are the real suckers, don't it?

Ultimately, "atlas will shrug". Personally, I believe before atlas shruggs, the US current account deficit will make a mess of this economy. Then, the US policy makers will have to figure a way out and there will be hell to pay for all.

28 posted on 02/09/2003 3:04:51 PM PST by staytrue
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To: waterstraat
There is quite a difference between going bankrupt in an honest business venture (90% of all new businesses fail in their first year) and going bankrupt because you used your charge cards and easy credit to finance a lifestyle beyond your means. I have no sympathy for the latter.
29 posted on 02/09/2003 3:09:05 PM PST by SamAdams76 ('Faithless is he that says farewell when the road darkens')
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To: Faithfull
In my personal opinion, filing for bankruptcy instead of paying off personal debts is the same as stealing

I can agree that if someone was given an interest-free loan, say by a friend, and then uses bankruptcy law to avoid repayment, it is morally the same as stealing. But it seems to me that if a bank is lending out money at 15%-20%, as is common with credit cards, debtors are paying through the nose, right from the start, to reimburse the bank for insolvency risk. The high interest they have already paid during the period they did make monthly payments was equivalent to insurance against their own bankruptcy. So if they do go bankrupt, and there is no bankruptcy fraud, it is unfortunate but not, morally, stealing.

30 posted on 02/09/2003 4:01:10 PM PST by Steve Eisenberg
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To: RCW2001
I have alot of trouble comming up with enough saline to give a tear to the banks,

This stupid punk kid who lives next door is 19, he isn't in college, he didn't finish high school and he doesn't have a job. Stupid hippie parents just don't have a clue

Rumor in the neiborhood is he is a stand-in in porno movies

This stupid kid just declared bankruptcy with something like $40,000 in creditcard debt.

Any bank stupid enough to give an unemployed 19 yearold high school dropout a creditcard DESERVES to get ripped off

Bad credit is a cost of doing business, they took the chance giving this stupid punk a creditcard, that was their business decision to make, it turned out to be a bad one

The government shouldn't be in business of defending corporations from their own stupidity

31 posted on 02/09/2003 4:34:14 PM PST by ContentiousObjector
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To: Faithfull
I can't believe your would equate cancelling debt 'every so often' as a biblical principle. Filing for bankruptcy is in direct opposition to the Biblical priniciples I know. In my personal opinion, filing for bankruptcy instead of paying off personal debts is the same as stealing...since the rest of consumers must pay for your irresponsibility. You are one scary person.....and certainly do not know your Bible.

If you never heard of The Year of Jubilee, the Day of Atonement, or understand why God commanded it, they there must be plenty of "Biblical priniciples that you dont know of".

People who have never read the Bible, and certainly people who have never read Leviticus, should never make such wild statements as you just did.

The Year of Jubilee, is known by all jews and protestants, and anyone who has read the Bible. All debts canceled, all mortages ended, all foreclosed property returned, all people sold into slavery freed, etc.

It is "scary" that YOU have never read Leviticus(esp Leviticus 25 and 27), that you have never heard of The Year of Jubilee, and that you equated a command of God(periodically forgiving debt) to "stealing".

It is scary that you pretend to speak as either a jew or christian yet you know nothing of this holy principle, or of the principle of "forgiving", not only explicit in The Year of Jubilee, but in the entire Bible itself. There is nothing more Biblical that the principle of forgiving - even if you never specifically read Leviticus or heard of The Year of Jubilee. A true jew or christain sees no contradiction in forgiving, or in forgiving debt periodically.

32 posted on 02/09/2003 6:37:20 PM PST by waterstraat
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To: SamAdams76
There is quite a difference between going bankrupt in an honest business venture (90% of all new businesses fail in their first year) and going bankrupt because you used your charge cards and easy credit to finance a lifestyle beyond your means. I have no sympathy for the latter

Bankrupcy law already prohibits all fradulent debts from being canceled - so spending money on credit that you never intended to repay is not a "dischargable debt".

And there is no difference between being irresponsible in business, or irresponsible in family finances. Irresponsiblity is irresponsibility.

If anything, if you want to compare the moral aspects, a "business bankrupcy" is the one that is immoral, since it hurtrs so many more people: suppliers, and employees who no longer have jobs nor 401-k retirement funds, and maybe no pensions either.

One has to ask himself if he thinks Gary Winnock of Global Crossing, etc, etc, etc, is morally superior because he ruined so many lives with layed off employees and wiped out all their retirement funds------ to the employee who lived on credit cards for a while after being layed off by that same Global Crossing to feed his children?

33 posted on 02/09/2003 6:45:15 PM PST by waterstraat
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