Is BK good for the economy?

[MyStimulus]

My tax money is going to banks that are getting bailed out because people are not paying their bills or their mortgages. Fannine and Freddie are costing me lots of money.

In case you were not informed properly, these banks are not getting bailed out because of the people, it is because of the government. The Clinton administration put hard pressure on the banks to make loans to people that typically would not qualify for a mortgage. The Bush administration did not do anything different to correct this. Now the banks have run out of money because all the bad loans over the past 10 years are catching up to them. The government is using your,,,I mean OUR money to correct a problem that they created as usual!! All the CEO's are still cashing in big and you are pissed at us who have had circumstances beyond our control. I had perfect mortgage history for the past 15 years, divorced my wife, and now the economy is in the tank. I am faced with no other choice due to things I could not control. I am soooooo glad that I did not grow up Liberal!!! By the way, if they did not use our money to bail out banks, do you really think it would not have been used for something else that you obviously would disagree with. Government is too strong and your money will get spent without your say for as long as we keep electing the wrong people. Just my $0.02<----this is what I will have left after BK...What an abuser I am!

[Rahaton]

Thanks for your post MS. I respectfully disagree with you completely.

1. Is shoplifting OK with the shop owner? Is shoplifting OK with the customers who do not steal?

Again, can I borrow $100,000 from you?

Do unto others as you would have them do unto you.

Um neither a borrower or a lender be? I assume you also know that biblically all debts are discharged after 7 years?

One of the things that you are missing sigferl is that the intent is different. In your shoplifting example and your silly request to borrow $100,000 you have no intention of paying the money back. In that case you are committing fraud and that is illegal and not dischargeable in bankruptcy.

So where does that leave you? You need to address the real situation if bankruptcy in the real world if you want to do more the sound like a troll.

[hereforinfo]

I have to add to Momisery

I recall being a kid in the 70s and such that many of my kid friends Mom's stayed home and the Dad's worked 40hr jobs and we all had food, clothes, Nice (not always new) cars and decent homes for the times... now today the past two decades for sure the cost of things have gone through the Roof as well as the costs to properly insure your assets and your lifes work... I agree with Two good incomes today you simply can't afford to live even simple means as we did just a short time ago.... I remember when there was small Mom/Pa shops all over the place selling daily goods familys used... and often times a line of credit could be had...paid monthly. Extremely rare nowadays.

In the 70's the average square foot of a single family home was 1600. In 2008 it was 2500. Cars have a lot more functionality and improvements in them now than they did in the 70's. Technology has grown by leaps and bounds and everyone wants more of everything - several flat screen tv's, ipods, cell phones, computers, high speed internet, wireless routers, cable or satellite, surround sound, Wii, dvd players in the house and in the car, etc. People give all of the above to their kids as well. The cost of healthcare has skyrocketed. All of that stuff costs money. Everything is bigger and better and that's why it now takes 2 incomes to support what most of us have come to consider necessities - the list of things that everyone feels they must have is much longer than it was in the 70's when all you needed was a home, one tv with some rabbit ears, a record player, and a basic car with a cb radio.

[hereforinfo]

In case you were not informed properly, these banks are not getting bailed out because of the people, it is because of the government. The Clinton administration put hard pressure on the banks to make loans to people that typically would not qualify for a mortgage. The Bush administration did not do anything different to correct this. Now the banks have run out of money because all the bad loans over the past 10 years are catching up to them. The government is using your,,,I mean OUR money to correct a problem that they created as usual!!

That's what started the downward spiral, but all of this was just another unintended consequence to some government intervention (which is why we need smaller government!). The bad loans didn't crash the economy, per se. It was the way the banks had packaged up and sold those bad loans that had the biggest impact. I think it's appalling that no one in the financial industry has been charged with anything in relation to this mess.

[DeadManCrawling]

It is good for MY economy.

[DeadManCrawling]

Remarkably, I think I recognize sigferl from a previous alias a few years back on this very board.

Sigferl, you seem to imagine that everyone who files BK is doing so out of a desire to screw the system, take the money, and retire to a life of pleasant gambling and women (or men) in some island nation. With ill-gotten gains.

A quick perusal of this board would be enough evidence to show this is not the case in nearly every BK.

You are misinformed.

Badly.

I, and most people here, would happily pay the bills.

However, it is not possible. The man who assaulted me so severely that I ended up disabled and unable to work, with hundreds of thousands of dollars in medical bills, ended up dead himself. Through no doing of mine. I love karma, though.

His death removed any possibility of suing him for what little money he had to pay my medical debts. Surely this debt was HIS fault, not mine? I did nothing to merit this attack and he was found guilty and sentenced shortly before he died of a stroke.

Is it wrong of me to, disabled as I am, and unable to pay, ask for relief under the laws that were designed for this exact purpose?

Should a disabled person have to pay for the cost of the very crime that caused his disability?

If your answer is yes, you are more ridiculous than any human being has the right to be. In fact, I would question whether such a mind is human in the first place. Sewage of the lowest level would come to mind.

[leena]

Um neither a borrower or a lender be? I assume you also know that biblically all debts are discharged after 7 years?

One of the things that you are missing sigferl is that the intent is different. In your shoplifting example and your silly request to borrow $100,000 you have no intention of paying the money back. In that case you are committing fraud and that is illegal and not dischargeable in bankruptcy.

So where does that leave you? You need to address the real situation if bankruptcy in the real world if you want to do more the sound like a troll.

I agree absolutely!

Bankruptcy is a symptom of an economy that runs on credit. Thirty years ago it was tough to get most credit cards. Forty years ago bank cards were basically limited to the affluent (my mom remembers getting a Diners Club card with a $200.00 limit in 1969 and feeling like they were really coming up in the world, because none of her friends had anything but a small department store card or two!).

I got my very first card as a college student. How perfectly crazy is *that*?? In the 80's, they floated credit cards aps all over campus for the first time. No student should be in anything but student loan debt, and they should consider that very carefully and keep them to a bare minimum.

The truth is, the ecomomy as it is now ticks on the extension of credit and few people own much of anything. Not their house, not their car, and thanks to bank cards and bad choices, sometimes not half the items in their homes. My grandfather was on a ten year mortgage for their home at one point, and my grandmother was not pleased. Whoever heard of TEN years to pay off a loan of any kind, she thought! This was back in 1950. Can you even imagine much of anyone you know *saying* that now???

The "catch 22's" now is that while the ecomomy would probably die completely and for good if you stopped all the credit except for limited mortgage loans, people would stop using credit in a hurry if BK was no longer available for credit card bills. That, I predict would have largely the same effect. Retail as it is, with the big screen TV purchases and the mega expensive tire rims and the other needless stuff people buy exists largely because people can put trash purchases on credit cards. Because of credit cards being available, people got convinced they "need" this junk. Grandma never thought she needed it becuase she had no Master Card to make it available to her.

Mind you, I do NOT advocate getitng caught on this rat mill. I was stupid, stupid, stupid to ever get involved in credit cards. I curse the day I submitted my first application/got my first pre-approved offer (I got a pre approval when I had no credit history. Ahhh, life in the 80's). I wholy owe up to my own responsibility in all of it. I really wish I could find the means to deal at least with my actual and original credit card debt (which is really only less than half of the amount that it became with interest and fees). I have to pay my student loans, though and that is just the way it is.

So, I can do two things now: pay my student loans and stay away from credit for life. As I said, I do not even really want to finance a car. I think I would be better off driving cheap cars for life. Better to spend that money on paying down debt and saving for retirement than impressing friends with the snazzy car.

I have learned a lot, and I value those lessons greatly. I might add that my creditors got a very substantial amount of the money I did actually spend, minus their horrible interest rates. I might further add that some of the same bank cards I filed on are banks that were benificiaries of the recent government bailout, and the reason for that bailout was largely their own insane mortgage lending practices and speculation on wall street. Credit card debt was but a tiny part of the portfolio of many of these banks. I hear a lot of that money is going into stuff like multi million executive salaries for 2010. That money is essentially our tax money. Who is stealing now?? Oh, and where is the goverment bailout on the student loans they have been so very sanctimonious about collecting? Where is the bailout for the mortgage defaulters. Gee, I guess only citizens are responsible for their debts, not banks...

[Ifonly]

I'm not going to discuss the whole BK "good vs. evil" thing because we all know this person has been here before and it's like running on a hamster wheel. But people worked HARDER before, that's our downfall, really? Are you kidding? If you look at people's fulltime salaried jobs, they spend more time there for less pay than ever before. And two income families have become more and more necessary as salaries have not kept up with prices. Simple layman's example (too lazy - oop, you caught me - to go pull stats from the internet) - when my father made $15,000/annually, his house cost $19,000 - roughly a bit more than one year's annual salary. Now even if you make $100,000, houses where I live (NE) ranged from $300,000 to $500,000 (before the crash). Even now, they're still closer to $200,000 and that's in a severely depreciated market. And whoever over-simplified the subprime mortgage crisis into Clinton forced bankers to give mortgages to unqualified borrowers, you've only pulled one page from the book. You have to review over 30 years of de-regulation to understand how greed and corruption put us here. I agree that every borrower is obligated to be educated but I still feel badly for the people around here (Poconos) that got screwed over by the ARM's, etc. They bussed people here from the Bronx and preyed on their emotions of wanting a better life for their children and pushed these McMansions on them. The realtors were in bed with the appaisors and builders to overinflate the value of these homes even more (partially why I think the market will NEVER go back to what it was - it was a lie). Some of these builders, etc. have gone to jail but that doesn't help the family in the home. And yes, they should have read the entire contract, not just page 1 with the first year's payment and they should have been more careful. People make these mistakes out of optimism and hope, I think. I'd not going to say stupid because we've all done it. And note, there were ZERO builders building the 3 bedroom ranch with 1.5 baths for a modest middle class home. Didn't exist. You bought the 5 bedroom, "keeping up with the Joneses" or nothing.

[JustIgnoreIt]

It's never going die until we all start ignoring the troll.

Yes folks, Just Ignore It, the Troll that is.

Week after week, "Thanks for your post xxxx" then it spews the same ol message. Brings nothing new to this forum, just ignore it. Don't fall for it as it enjoys to see everyone get riled up over its posts.

[frogger]

We could just be Biblical and have a year of jubilee. Reset everything to 0 and start over.

[junker]

hey sig..have you looked at a ammoritization schedule lately on say a 100k house loan? most of the folks now that are filing bk...have paid their bills and house payments regularly for years...most people know with the high interest rates cc. charge the original loan is paid many times over in interest over the years...same with a house...it takes many years to make a dent in the principal on a house...in other words the banks and cc.s are getting their money many times over before a lot of people even think of bk....if you have been paying house payments for 10 years and finally go bust...how much did the bank lose.... nothing......they got their interest many times over...and got your house which they will sell....and also got your government bailout...so where is the money going???? same with cc.s how long does it take to pay off a 10k balance at minimum payment?? you have paid the principal many,many times over before reducing the balance....so quit the sob story with the banks losing....i hear violins playing every time i read your biased posts for big business...they arent losing a dime.......and yes bk is good for the economy....it keeps lawyers, judges working...

[leena]

hey sig..have you looked at a ammoritization schedule lately on say a 100k house loan? most of the folks now that are filing bk...have paid their bills and house payments regularly for years...most people know with the high interest rates cc. charge the original loan is paid many times over in interest over the years...same with a house...it takes many years to make a dent in the principal on a house...in other words the banks and cc.s are getting their money many times over before a lot of people even think of bk....if you have been paying house payments for 10 years and finally go bust...how much did the bank lose.... nothing......they got their interest many times over...and got your house which they will sell....and also got your government bailout...so where is the money going???? same with cc.s how long does it take to pay off a 10k balance at minimum payment?? you have paid the principal many,many times over before reducing the balance....so quit the sob story with the banks losing....i hear violins playing every time i read your biased posts for big business...they arent losing a dime.......and yes bk is good for the economy....it keeps lawyers, judges working...

SO true! I can think of one card of mine in particular. Had it for 15 years, balance never higher then 3K, now filing it (because I must) with only $500.00 on it. Even when I paid over a couple of month, those people made WAY more interest on me than $500.00 bucks! Way more.

Bankruptcy is not good for the economy. It is just essential to the screwed up way it functions now. If people can't finance the 5K televisions, they will not buy them. If they do not have the relative security of knowing they can file if things can to wicked, they will not finance. This insatiable wheel of credit and spending that feeds the current economy will not work with everyone running on a cash only basis...

Cash only is my life from not until I die, but I swear if everyone did it, what would happen to the economy would make now look great and even 1929 look not so bad.

So, yes the economy must have BK available to people now to function. The functioning is basically screwed up, though and I have no idea what will happen when it finally and completely blows up.

[JRScott]

Some folks like the OP never understand suffering and pain that others feel. The only way they learn that is if they go through it as well. Perhaps we should all pray that the Lord should send a drought of money into his life that perhaps he might understand the true nature of what causes the vast majority of people to file bankruptcy?

[forgotten]

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[MSbklawyer]

Some folks like the OP never understand suffering and pain that others feel. The only way they learn that is if they go through it as well. Perhaps we should all pray that the Lord should send a drought of money into his life that perhaps he might understand the true nature of what causes the vast majority of people to file bankruptcy?

He still wouldn't understand. See, his circumstances would be different. Special. Everybody else that had to seek bk relief is a lowdown, cheating skunk, wrongdoing skunk. He, however, would see his own unfortunate circumstances as entirely the fault of "other people" and his discharge of their debts as their just reward for the trouble they caused him.