Is shopaholism a big contributor to BK?

[lotsahats]

Regardless of what got us here, I think it's safe to say that bankruptcy has been a learning experience for us all.

[Flamingo]

I was thinking about the times that some friends and colleagues of mine had cut up their wives' CC's because they felt that they were spending too much. (I had one friend whose wife would bring home a new article of clothing EVERY WEEKDAY, stopping at the mall on the way home from work!) It seems that had these husbands not done so, there may have been some financial problems that - who knows - may have ended up in a BK as well.

I guess that the question that I am getting at is if folks here feel that had they - or others in BK - not spend so much on non-essential stuff, or let's say, spent more in line of what folks from their income bracket would spend, etc., then BK would not have resulted. Or do you think that shopaholism by and large only affects folks that aren't in danger of BK?

NOTE: I realize that my anecdotes here seem to be sexually slanted, but I've only known one case of a man whose wife had to put HIM on a financial diet (he always liked buying newer and faster bass boats and hunting rifles, etc. - he was NOT a metrosexual. )

Debt causes bankruptcy no matter how one got into debt whether via poor choices, poor planning, poor money handling, excess spending or medical issues.

[mountanddo]

Is shopaholism a big contributor to BK?

Well....of course it is. I would say it is the main contributor of Bankruptcy. If everyone paid cash for what they needed and lived within their means then credit cards wouldn't be necessary. There are not a lot of people that use credit cards to pay for only things that they need like food, gas, shelter. There really is no need for that. But then you knew that didn't you ;)

After reading some of the responses I feel that I have to take back what I've said here. I guess what I was trying to point out was that a lot of things people buy we don't really need for survival. I never went out and went wild spending but I did purchase things that if I had only to use cash I may not have bought it in the moment and possiblely I may have decided not to buy it. Things like makeup, air fresheners stupid crap like that. Stuff I "needed" but not really. The only luxury item I bought was my TV and computer but it was 2 years before I filed Chapter 13 on these items. I sure scrutinize a lot more now that I am just using cash and don't have cc to fall back on.

I had no problems paying my cc's before I lost my job but once I lost it I did use them inbetween jobs thinking I'd be able to make up the spending once I got a new job. Problem was that I never went back to my pre-job loss income. Missed payments and higher interest hammered the nail in the coffin.

[fileda13]

To the O.P. - I feel bankruptcy is situational. For some your point is true, that spending on non-essentials is a large contributor to BK. BUT, maybe someone had a decent paying job and was spending on non-essentials and then the job gets taken away. This may not necessarily mean one is living beyond their means, but sometimes when you hit a brick wall it's too late. For others it's medical. For others it can just be an upside-down economy.

[AngelinaCatHub]

Regardless of what got us here, I think it's safe to say that bankruptcy has been a learning experience for us all.

I strongly agree. All in all, I would not change a thing in my past to avoid this. What we have learned if far superior to what we have lost. You could not pay for this education although in bk you do.

Our values have radically changed. We are happier broke now than we ever where with a bunch of "things". Things mean nothing.

[MSbklawyer]

Depends what you mean by 'shopaholism'. I suppose that excessive credit card debt could be considered a symptom of 'shopaholism' or a form of it. But then, $5K of credit card debt is not 'excessive' if you're earning 6 figures, but it can quickly become 'excessive' if, the next day you're earning 0 figures.

In my practice I have quite a few clients who just charge up more on their credit cards than they can ever afford to repay before they realize it. They get this "Platinum" credit card offer in the mail -- with "Double Rewards" no less -- and a credit limit of around 25% of their annual earnings, and they accept it. This gives them an illusion of wealth. Which restaurant should we eat at tonight, honey? Disney World? Well sure, why not. The statements come in -- no big deal, the minimum payment is only $50 -- which is what they pay. Then, when the stark reality that they have to repay all this "wealth" begins to intrude, because their interest on the debt alone is chewing up a substantial part of their income, they seek bankruptcy. How's that for a "Double Reward"? If that's what you mean by 'shopaholism' then yes, at least in my practice, it is a substantial contributor to personal bankruptcies.

Sometimes, but far less often than the former scenario, I have clients who sit in front of the TV all day with a quart of Haagen Dazs and order every $19.95 piece of trash that gets thrown up on the screen. To these people, it's a compulsion and they just can't pass up on buying "A Fifty Dollar Value!!! But Hurry!!! Supplies ARE limited!!!" every time they see it. Every member of their family has a Shamwow! or 6. They literally paid $20 for a rag. Plus shipping and handling. If that's what you mean by 'shopaholism', -- I have other words for it-- then no. It happens, but not often enough to be a substantial contributor.

[AngelinaCatHub]

Clap, Clap, Clap, MSBKlawyer. How correct you are. I've seen this. Not afflicted, but I know people as you describe.

How about this one: A friend of mine medically challenged, mentally more, in that she is a hoarder. From one house she sold to her Mother's house she inherited. A bit on a profit and I told her, "you have a new start here, do not take all that crap here" She did of course and now the one path through all the boxes of stuff she could not know where or what is in any of them. This place paid for, so she gets a loan shark mortgage due to three months not paid taxes. $1800 dollars, and the high mortgage $17,000. EDIT: In which she purchased toys along with whatever, but it went fast.

I like this old soul. But went ballistic in that she paid only the interest and put online to spam her friends she was going under. I was livid.

We gave her a fine running car. An oldey but goody. I told her disregard the oil low gauge, it is defective but all oil and things were just taken care of. "She forgot". low oil came on. One quart. Ran another mile low oil came on, engine started to run badly. One more mile yes, one more quart and the engine blew the first day. I cannot tell you how pizzed we were. Four quart oil, seven in engine, blew rings and trashed the engine.

I gave her 1K last January, to get her off the monthly pay day loan of $500 at 400%. I told her, "here, 1K to pay off and 1K to get ahead, promise never to use them again". That lasted four months and so, what to do?

NOTHING. You just cannot help a person who "knows it all". She is brilliant to her detriment and of course mental. She has enough "junk" that meant SOOO much to her yet cannot tell me what is in any single box. She has tools and garage stuff that could give her thousands in a garage sale, yet has every excuse why she must keep such.

I have had to write her off. The last visit, as she does not keep in touch anymore, was Mrs. and I delivering her Christmas dinner. A hug and a short visit, and to date, not even an email thankyou for that.

When a life ring is thrown to a drowning person, they have one effort to do. Reach for it. When a person will not even do that, then you have to give it up. 'Hub

[jacko]

So what happened? Did she loser her home?

[QUOTE=AngelinaCatHub;556026]Clap, Clap, Clap, MSBKlawyer. How correct you are. I've seen this. Not afflicted, but I know people as you describe.

[Flamingo]

Sometimes family and friends become enablers to those with impulses by providing money and whatever as the situation gets worse. As to hoarding, family/friends anonymously can call their county or state Board of Health and they can have the situation reviewed if it is a fire or health hazard to anyone living there and sometimes that is the first step to reality for the hoarder. Exxcessive shopping, hoarding, eating, etc. is usually all OCD disorder related and runs in families.

[tradinglife]

I take total responsiblity for my financial meltdown. If I had been more frugal, I could have weatheres my income drop and the minor family crises we all have. But I was living so close to the edge,m it took me very little to go over the edge. The BK changed me for sure, I have went from a spendthrift to clipping coupons and driving a 150,000 mile car. Friends and family have commented how I am nicer and more humble than I used to be, lol. I am ok with my new debt free life, but I am sad our kids have had to move from rent house to rent house like gypsies the last couple years and change schools.They where used to living in a gated community and living a pretty sheltered life. They are young enough that the experience hopefully will make them stronger as they get older.

[AngelinaCatHub]

[QUOTE=jacko;556046]So what happened? Did she loser her home?

Clap, Clap, Clap, MSBKlawyer. How correct you are. I've seen this. Not afflicted, but I know people as you describe.

Not yet as she put out all her address book whoaing her downfall and lack of funds. To all her friends. Very improper thing to do. When she again started to use her pay roll cash advance I told her she broke her promise and don't ever ask me for aid again. After stupidly destroying our car that ran like a top for five years (purchased at an auction) that was it. Her daughter paid her current three year tax assessment with interest. She is still paying interest only on a once paid for house and lot.

Get this, Jack: She said she needed to borrow 17K to pay off a three year tax that SHE ran up so, she got the mortgage at 18% paid off all her maxed out credit cards, and purchased Blackberry, Laptop and other toys. Then she ran up the taxes for three more years until the mortgage lender threatened to call her note. Back taxes are written into a no, no in the mortgage. She still owes the whole amount, and another tax year is coming. She has a garage full of tools that her Father (deceased) owned that would give her a tidy sum even at garage sale prices. She won't part with anything at all, just boxes it all up and stacks on another full box. She has paperwork from 20 years ago that she does not even know what it is "but it could be important" she says. I told her to go through a box a day and shred it or sort it and reduce what she does not even know she has. Save the good stuff she loved, and sell the crap. She won't do it. How do you help a person like that? You don't. I'm done. She has a brilliant mind but no common sense. She knows it all. Excuses for all. 'Hub

[MSbklawyer]

They are young enough that the experience hopefully will make them stronger as they get older.

There's no doubt about it that it will. Everyone hits some rough patches in the road of life sooner or later. I think kids who have had to see their parents cope with will be much better people for it.

[lotsahats]

Depends what you mean by 'shopaholism'. I suppose that excessive credit card debt could be considered a symptom of 'shopaholism' or a form of it. But then, $5K of credit card debt is not 'excessive' if you're earning 6 figures, but it can quickly become 'excessive' if, the next day you're earning 0 figures.

In my practice I have quite a few clients who just charge up more on their credit cards than they can ever afford to repay before they realize it. They get this "Platinum" credit card offer in the mail -- with "Double Rewards" no less -- and a credit limit of around 25% of their annual earnings, and they accept it. This gives them an illusion of wealth. Which restaurant should we eat at tonight, honey? Disney World? Well sure, why not. The statements come in -- no big deal, the minimum payment is only $50 -- which is what they pay. Then, when the stark reality that they have to repay all this "wealth" begins to intrude, because their interest on the debt alone is chewing up a substantial part of their income, they seek bankruptcy. How's that for a "Double Reward"? If that's what you mean by 'shopaholism' then yes, at least in my practice, it is a substantial contributor to personal bankruptcies.

Sometimes, but far less often than the former scenario, I have clients who sit in front of the TV all day with a quart of Haagen Dazs and order every $19.95 piece of trash that gets thrown up on the screen. To these people, it's a compulsion and they just can't pass up on buying "A Fifty Dollar Value!!! But Hurry!!! Supplies ARE limited!!!" every time they see it. Every member of their family has a Shamwow! or 6. They literally paid $20 for a rag. Plus shipping and handling. If that's what you mean by 'shopaholism', -- I have other words for it-- then no. It happens, but not often enough to be a substantial contributor.

I still don't know what a Shamwow is.

[MSbklawyer]

I still don't know what a Shamwow is.

It's a rag. A $19.95 super-duper, whiz-bang, 'miracle' rag made of space-age fibers developed specially for NASA and sold on the TV by a guy who looks like he has a rooster comb on top of his head:




Spill red wine on your snow-white carpet? Just throw a shamwow! down on top of it and go to bed. In the morning, all the wine will be gone and your carpet will look better than new. Honest! Wash your car with it, bath your dog with it, use it as a shower mat, and it never gets dirty. Just wring it out and start all over.

It's probably too late for you to get one though. Supplies were limited. Available only through the special TV offer. Not sold in stores. (Because like most of that $**t they sell on TV, if they sold them in stores, their customer service line would be backed up out the door with people demanding their money back.)

Really: It's a $19.95 rag.

[AngelinaCatHub]

It's a rag. A $19.95 super-duper, whiz-bang, 'miracle' rag made of space-age fibers developed specially for NASA and sold on the TV by a guy who looks like he has a rooster comb on top of his head:




Spill red wine on your snow-white carpet? Just throw a shamwow! down on top of it and go to bed. In the morning, all the wine will be gone and your carpet will look better than new. Honest! Wash your car with it, bath your dog with it, use it as a shower mat, and it never gets dirty. Just wring it out and start all over.

It's probably too late for you to get one though. Supplies were limited. Available only through the special TV offer. Not sold in stores. (Because like most of that $**t they sell on TV, if they sold them in stores, their customer service line would be backed up out the door with people demanding their money back.)

Really: It's a $19.95 rag.

I drink Merlot. I do that (as in red) it better be good enough to take up my blood as well when Mrs. sees it. 'Hub