Posts Tagged ‘bankruptcy’

Speaker Pelosi and 30 California Democrats: “Banks Need To Be Held Accountable.”

Today, Speaker Pelosi and 30 California Democrats told the justice department that “it is time that the banks were held accountable for their practices.” Really? You guys are just figuring this out? Wow, Congress is sure slow on the uptake…or maybe it’s all that Goldman Sucks money flowing into the pockets of elected officials that’s clogging up their brains.

Let’s see: over the past two years, we have seen the foreclosure rate continue to rise and hundreds of thousands of Americans have been kicked out of their homes in spite of programs designed to help them. Going through the HAMP process is a nightmare in and of itself, aside from the trauma of foreclosure itself, because the banks just don’t want to cooperate. They won’t even cooperate on short sales most of the time! Recently, we’ve had the Ally Bank signature debacle and another company, Lender Processing Services (LPS) has been in the news lately because apparently they’ve been having their employees sign authorized employees’ signatures to foreclosure documents.

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Saving America’s Middle Class? Or Drowning It In Austerity?

Today’s post on Frugal Dad was written by a guest blogger pimping his own site, thedailymiddle.com, a site that claims to be about middle class survival during these hard times.

I read the post on Frugal Dad and I see that the author is using statistics gathered by Elizabeth Warren. Going to his site, he even has a category for her and he’s put up some of her videos. However, he takes her statistics and completely misinterprets them to continue to put forth the “overconsumption myth” which Warren has also gone to great lengths to debunk.

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Elizabeth Warren Predicted The Financial Collapse Back In 2004

 

Elizabeth Warren,  a Harvard Law Professor and the current chairwoman of the Congressional Oversight Committee in charge of overseeing usage of the TARP bailout funds, predicted the financial collapse long before anyone else was talking about it.

In this 2004 interview with Dean Lawrence R. Velvel where she discusses her book, The Two Income Trap,  she reveals the instability that pervades the lives of most middle class Americans and why so many end up in Bankruptcy court. She says that in order to keep up with the expenses, people with median incomes have been forced to borrow and borrow. Why? Because the median income in the United States is increasingly not enough to keep up with the cost of living. She talks about the fixed expenses that families have, such as the mortgage payment, health insurance, and educational expenses as having grown dramatically in the last generation. It is important to understand, here, that, these fixed expenses can’t be cut back.  That’s why they’re called “fixed expenses.”

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The Over-Consumption Myth Is Keeping Us From Enacting Meaningful Financial Services Reform

Despite the persistent rhetoric that people in financial trouble deserve to be there because they made poor choices and now must face the consequences of those choices, the real story behind why so many American families are riding the edge of financial devastation is not as simple as that.

As Elizabeth Warren explains in her paper entitled the Over-Consumption Myth,  the average middle class family carries more debt than it did a generation ago. However, this debt is not due to overspending on frivolous items such as designer clothes, designer foods, or big screen televisions.

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The Truth About Bankruptcy

In this post over at Frugal Dad, guest blogger Neal Frankle asked this question: “Is it wrong to ask to have your debts forgiven?” In his post he mentions actor Stephen Baldwin, a born-again Christian whose income has dried up  as a result of his own choices to refuse roles based on his new-found faith, and who now is in bankruptcy.

The number one reason for bankruptcy is medical bills. The number is over 60%. Among those, more than three quarters have medical insurance. As for the rest, all report some sort of misfortune, most commonly a job loss or other decline in income. Only 9% of bankruptcy filers reported no misfortune.

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Wage Garnishments On The Rise : How To Protect Yourself

gavel As the economy continues to sour and more people fall behind on their bills, more people find themselves being sued by their creditors, or more accurately, by debt collectors. 

Because most people don’t know how to react to being sued and very often do not show up to court, creditors largely win by default. Once a court judgment has been entered, then the creditor may collect by garnishing wages, in most cases, a quarter of take-home pay. Especially in this economy, where every dime counts, having a quarter of your wages disappear into a garnishment can be devastating.

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Judgmental, Much?

This post, in response to this one is yet more evidence that the sanctimonious “live within your means” and “pay your bills no matter what”  hyenas have no empathy.

Obviously, Abigail has never taken a financial misstep in her life, so much so, that she feels she is eminently qualified to sit on her high horse and shake her proverbial finger at everyone else.

My heart goes out to Emily, the author of the original post. I can’t imagine how hard it has been for you, losing a child,  while facing your financial difficulties. I want to thank you for sharing your story and I hope that you and your husband make the most of the second chance that bankruptcy affords you.

Now for my response to Abigail’s post:

 

Yes, thank goodness those creditors won’t get more things to help make up for the losses they’re taking on your debts. Nothing but gratitude that those vultures — they want you to pay back what you spent! — don’t get your stuff to make up for taking a chance on you and losing. Suck on that, people who expected you to live up to your responsibilities!

Aside from the fact that credit card companies and banks encourage people to take on debt, even when it may not be in their best interests to do so, no one ever borrows money without intending to pay it back. Defaults are just a cost of doing business for these “creditors.” Please don’t make it sound like there are actual “people” who are being denied their due, much less being hurt by the fact that someone who got in over her head took advantage of bankruptcy protection afforded by the Federal government.

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