Money and debt - I don't feel so bad about Ch. 7 now

[debtmonster]

A friend of mine told me about this video:
http://video.google.com/videoplay?do...74362583451279

It's over 45 minutes. It explains how debt and money work. It talks about how banks lend and create money. It's very educational. I'm watching it right now. But after watching it, now I don't feel bad about filing Chapter 7 at all. And to be honest with you, I never want to borrow money ever again after all of this mess is overwith. I want to buy my cars and house all in cash for now on. NO MORE DEBT!!! This debt and banking system is nothing but a huge scam that all of us have fell for. I mean honestly! We are all crazy to pay for the privilege of using credit. I hope my credit score stays in the low 400's forever. I never want to use credit again for the rest of my life.

If you got the time, I urge all of you to watch that video. I am watching it bit by bit. I pause it when I am answering emails or the phone and what not. There's a lot to learn when it comes to banks and debt. And since all of us here are going through a big mess, it's nice to learn how the system works.

[trying_to_fix]

I just went through a Chapter 7 and I don't blame the financial institutions for my mess. They are a business who's sole existence is to make money. Credit is a tool just like a chainsaw. If you're not careful with it, it can hurt you.

But that doesn't necessarily mean I will never use a chainsaw again - it just means I am now more aware of the pitfalls and will be more careful with it.

If you decide to never use credit again that is your choice but there are many things in the world today that unfortunately make use of a credit score so it's important to maintain a decent score.

I'll still use credit going forward, but I'll be more careful and exercise more restraint in the future. The banks will be working for me instead of the other way around.

[debtmonster]

Usury was banned by religions years ago and that's what interest is. It should be illegal.

[jeb]

Dateline NBC Sunday

If anyone whats to know how we got into this mess and how it all works, Dateline had the best explanation I have seen Sunday night - this was the first of three parts.

http://www.msnbc.msn.com/id/29827248/

[debtmonster]

That's a great post! Thanks for sharing! I'm reading it now. I'm going to be one of those same people waiting for the sheriff to come and throw me out and I want to learn more about that experience and how much time I will have.

[Flamingo]

A friend of mine told me about this video:
http://video.google.com/videoplay?do...74362583451279

It's over 45 minutes. It explains how debt and money work. It talks about how banks lend and create money. It's very educational. I'm watching it right now. But after watching it, now I don't feel bad about filing Chapter 7 at all. And to be honest with you, I never want to borrow money ever again after all of this mess is overwith. I want to buy my cars and house all in cash for now on. NO MORE DEBT!!! This debt and banking system is nothing but a huge scam that all of us have fell for. I mean honestly! We are all crazy to pay for the privilege of using credit. I hope my credit score stays in the low 400's forever. I never want to use credit again for the rest of my life.

If you got the time, I urge all of you to watch that video. I am watching it bit by bit. I pause it when I am answering emails or the phone and what not. There's a lot to learn when it comes to banks and debt. And since all of us here are going through a big mess, it's nice to learn how the system works.

This is nothing new - all that information has been around for decades, taught in economics classes in high school, etc. Most Americans got caught up in the credit trap by thinking they could live beyond their means just so they have the biggest and brightest gizmo on the street to outdo the gizmo down the street. So what if we can't afford it...we'll pay out for it and look really good. And they really didn't need the gizmo to begin with and bought more and more other gizmos to go along with it. No one forces anyone to apply for a credit card or a loan and credit/loans are given based on one's creditworthiness at the time and the low risk of default to the lender. The economy will now force everyone to live within their means and schools need to take the stand in teaching more about what happened and how many American consumers got sucked right in. One of our good friends is a high school teacher and the District has already incorporated all this in their social studies and economics curriculum. Americans just have to realize that who you are is not based on the material items you have and if you don't need it, don't buy it or fall for the sales pitch.

[kathy4530050]

Usury was banned by religions years ago and that's what interest is. It should be illegal.

Interesting, isn't it? Islamic banks in the Middle East don't charge interest and have given billions of $$ in interest-free loans to the developing world. Imagine that! Struggling Third World nations moving forward without the burden of outrageous interest rates on top of enormous debt. And the banks thrive. . . we DO have alternative models . . and they work.

[debtmonster]

I am far from being religious as possible. But when it comes to that usury thing, I am all for that! OUTLAW INTEREST!!

[OhioFiler]

Interesting, isn't it? Islamic banks in the Middle East don't charge interest and have given billions of $$ in interest-free loans to the developing world. Imagine that! Struggling Third World nations moving forward without the burden of outrageous interest rates on top of enormous debt. And the banks thrive. . . we DO have alternative models . . and they work.

I don't think Sharia law will go over too well here in America.

[debtmonster]

I don't think Sharia law will go over too well here in America.

No my problem. I don't want to pay interest. That's why all of us are going bankrupt. The interest and penalties gets so far that you get to a point of no return. That's where I am now. There's no way I could pay back $360,000 in debt now where I barely am taking home $2,000/mo. after taxes.

[fltoo]

Since debt interest is why we are all going BK, for you, let's assume 150,000 of your debt is interest and penalties.

So, if it wasn't for interest, you could pay back 150,000 in debt?

[SBayBruce]

Now, this is something that has always bothered me, not interest, per se, but "usury" which is usually understood to be "excessive" interest. Why do banks PAY us 2% on savings but CHARGE us 16% on credit? Should it not be the other way around?

This is how so many people (including yours truly) get into credit card trouble in the first place. The credit card company issues you a card. Over time, as you make payments on time, they raise your limit. You make it to "Platinum" status, etc. The catch is, if you carry a balance, the INTEREST. For example, lets say you have a $5,000 card, you owe $4150 on it, your minimum payment is $112 a month. Doesnt seem so bad, till you noticie that INTEREST which is about $51! Yikes! Even with a beginners $1,000 card, if you max that and make minimum payments only, it would take decades to pay back, which is what they ARE HOPING FOR. If you pay your statement every month, you are know in the industray as a "deadbeat," viz. they are not making any interest income on you! (Isn't that hilarious?)

Bottom line is this: If I lend you $1,000, and expect you to pay $1622 back, thats LOAN SHARKING and I go to prison if I get caught. How come the banks are exempt from this? OH, thats right they have all those lawmakers in their pocket, how could I forget? We don't need Sharia law, just interest caps.

[debtmonster]

Since debt interest is why we are all going BK, for you, let's assume 150,000 of your debt is interest and penalties.

So, if it wasn't for interest, you could pay back 150,000 in debt?

That's not interest and penalties. That $360k is mostly principal owed. Maybe a small amount is interest. When I came I added up those figures, they were from the original balances before the collection agencies got hold of them. My house is about $140k of that. The rest is repo's, credit cards, old utilities bills, medical bills.

[fltoo]

Gee, so sorry, you said that ALL of us here were in BK because of interest. Now you are saying its all principal. So, please be specific when you blame something for your BK. I get easily confused in my old age.

[fltoo]

Now, this is something that has always bothered me, not interest, per se, but "usury" which is usually understood to be "excessive" interest. Why do banks PAY us 2% on savings but CHARGE us 16% on credit? Should it not be the other way around?

This is how so many people (including yours truly) get into credit card trouble in the first place. The credit card company issues you a card. Over time, as you make payments on time, they raise your limit. You make it to "Platinum" status, etc. The catch is, if you carry a balance, the INTEREST. For example, lets say you have a $5,000 card, you owe $4150 on it, your minimum payment is $112 a month. Doesnt seem so bad, till you noticie that INTEREST which is about $51! Yikes! Even with a beginners $1,000 card, if you max that and make minimum payments only, it would take decades to pay back, which is what they ARE HOPING FOR. If you pay your statement every month, you are know in the industray as a "deadbeat," viz. they are not making any interest income on you! (Isn't that hilarious?)

Bottom line is this: If I lend you $1,000, and expect you to pay $1622 back, thats LOAN SHARKING and I go to prison if I get caught. How come the banks are exempt from this? OH, thats right they have all those lawmakers in their pocket, how could I forget? We don't need Sharia law, just interest caps.

There are usury laws. Each state sets its own cap. The state of DE has no cap, so the credit card companies became friends with our Vice President and moved their businesses there.

States should do a better job of regulating, but most of the time they don't want to due to the revenue and jobs these companies bring to the state.

BTW, what does the interest rate charged have to do with getting in severe debt? If you are paying the minimum, you are in trouble no matter what the rate.