Katrina Victims Pile Up Credit Card Debt

[spinbaby]

Katrina Victims Pile Up Credit Card Debt
By DAVID KOENIG, AP Business Writer 2 hours, 26 minutes ago

PLANO, Texas - Jerry and Deborah Alciatore fled New Orleans with nothing but a couple of overnight bags, an ice chest and their credit cards. The bags emptied quickly, but two weeks after Hurricane Katrina hit, the balance on the credit cards is mounting fast.

Their first week on the road, they charged $1,600 in food and hotel bills in Houston, about $400 worth of clothing, mostly from discount stores, and a couple hundred more on gasoline.

Jerry Alciatore splurged $1,200 on a laptop to keep in touch with employees of his small architectural firm, pushing the credit card bill to about $5,000. They'll soon have to make another mortgage payment on their house in Metarie, which was damaged but not destroyed by 3 feet of floodwater.

http://news.yahoo.com/s/ap/20050914/ap_on_re_us/katrina_credit_card_debt_3

[izzie]

1. Well with the double payment it will not take to long to pay them off.

The courts will sure not help them.

[saigon68]

5. The new Bankruptcy Act will bleed them DRY

Thanks to the MBNA and CAPITAL ONE Lap Dogs and DINOS in Congress

[cliss]

10. Yes. Chances are very good

they will lose their house over this.

Also, I hate to be critical, but did they really need to buy $400.00 worth of clothes? And why a new laptop? Couldn't they see the shit had hit the fan when Bush arrived?

That should tell you that disaster is not far away.

Now if it was me, I would have bought a tent and camped out. I would have cooked my meals on a propane stove rather than eating out. If you think about it, $5,000.00 is pretty spendy over - what - 2 weeks?

And I'm assuming the architectural firm is not going to have any business for a while? Wise up, kids.

[shrike]

17. I think a lot of people are shell-shocked over this thing

An acquaintance of mine has family in New Orleans. They all got out okay, but trying to assemble some sort of a life is not easy. They don't have vehicles and even trying to get to the Salvation Army or Goodwill to get cheap clothes is a challenge.

They are middle and upper-middle class and cannot seem to get used to the idea that they are going to have to line up with everybody else. She is helping them as much as she can, long distance, and pounding it into them that they have to take what help is out there. There are fifteen of them in one house. They are starting to listen to her finally.

[Missy Vixen]

21. It's a bit hot in Texas this time of year

>Now if it was me, I would have bought a tent and camped out. I would have cooked my meals on a propane stove rather than eating out.<

Camping may have not been appropriate or workable for a variety of reasons. Perhaps one of them has a health issue that precludes spending 24x7 outside in the Texas heat. The owner of the architectural firm will be able to write off his new laptop as a business expense.

There are probably thousands of stories like this; I don't know what I would have done if we found ourselves in that position, and I submit that nobody else does, either.

Julie

[abluelady]

2. They Are Making the Administration Happy

Help those poor credit card companies that are hurting when people file bankruptcy. Oh, I forgot--no more of that.

[SuniSurf]

3. October Credit Card Surprise for 2005

http://www.dailykos.com/storyonly/2005/8/20/173341/766

<snip>
Your Credit's The October Surprise 2005
by cskendrick
Sat Aug 20th, 2005 at 14:33:41 PDT
Cross-posted at Booman Tribune
It shouldn't be a surprise. I mean, after all, people have had months to prepare. There's no shortage of articles in the Internet about it.

And it's for your own good. Just ask the guys who sponsored the legislation.

But that's just it; come October, all minimum payments for credit cards must be quoted for a 10-year paydown. That's roughly 4% of your outstanding balance.

Most credit cards quote the minimum payment for a 20-year paydown. That's 2% of your outstanding balance.

Sur-prise, Surprise, Surprise!
It won't be just college kids and retirees on fixed incomes who are sandbagged, either. Many small business owners use personal credit cards as cash flow management tools. Likewise persons who work for commission, or have seasonal cash streams (skilled and unskilled laborers, for example).

Banks are already budgeting for massive defaults, on the order of tens of thousands of cardholders. It might not be nearly enough.
It promises to be a nightmare for millions of surprised working- and professional-class families.

It also promises to be a nightmare for issuers of credit cards, because what is about to happen to the consumers could scare them out of using cards at all in the short run.

"Your Credit Card Payment Just Doubled"
From the outset, there seems to be question if banks really are doubling their rates at all. From what I have been able to tell, some people would prefer that cardholders be surprised -- after the new bankruptcy laws become effective on October 17 of this year.

<snip>

[DBoon]

8. interesting point about small business using cards for cash flow mgt

Tightening up credit card use will make it harder to start and maintain a small business.

[Theres-a]

15. ALOT of people are going to be surprised

I've mentioned it here and there,and people are largely unaware that this payment doubling is coming.So sad.Evil Bastards.

[RamboLiberal]

4. Speaking of damage - did anyone catch on CNN the Insurance

companies playing their maddening games in Biloxi this morning? The usual blah, blah, blah. You don't have flood insurance and it was the storm surge not the winds that destroyed your home - so we're not paying even though your roof is in your neighbors trees. Or we'll only cover the top of your house, not the bottom which was damaged by flood.

A lot of these people are going to get NADA in insurance money. Heartless scumbags these f'in insurance companies.

And has our worthless congress done anything yet to relieve these people of the onerous bankruptcy bill those scumbags passed. And fuck you Joe Biden for kissing up to the credit card companies and not the rest of us.

[AllegroRondo]

6. "If the new bankruptcy bill is such a good thing....

... why do we need to exempt hurricane victims from it?"

Bill Maher

[sando]

11. The new bankruptcy bill

Note how the media keep saying it will hurt the poor??? It is aimed straight at the middle class. The poor generally can't afford the attorney fees for filing bankruptcy. You're going to hear some real screams and not just from Katrina victims but from all those indirectly affected by Katrina once the bill goes into affect.

[NashVegas]

24. That May Be Its Redeeming Value

As you say, this will cut across all lines. The poor and those who have good incomes but lousy self-control.

We'd all have stronger backbones in this country if we weren't over our heads in debt.

[Bush_Eats_Beef]

7. "The economy is STRONG, and gettin' STRONGER."

I remember Bush's early words of comfort in the wake of 9/11..."Go out and BUY something."

[shanti]

9. OMG

that is a frightening picture of the shrub!

[Genki]

12. From AMERICAblog:

Bankruptcy Laws: If They're Unfair To Victims of Katrina, They're Unfair To Everyone
by Michael in New York - 9/13/2005 02:16:00 PM

We asked yesterday when Bush was going to demand Congress cancel those draconian bankruptcy laws going in effect October 17. How could he look at all the people whose lives have been destroyed, how could he face the owners of all those small businesses crushed by Katrina and say, "Screw you?" Apparently, we weren't the only ones asking.

According to USA Today, consumer advocates and Democrats want to delay the bankruptcy law or exempt hurricane victims. Even Bush may be too embarrassed to see these meanspirited new laws applied to the families devastated by Katrina:
The Bush administration is looking at "a long list of ways to help those affected by the storm," including providing them with some relief from pending bankruptcy rules, says White House spokesman Trent Duffy.
This raises the question: if the new bankruptcy laws are so draconian or unfair for victims of Katrina, why aren't they unfair when punishing the victim of the next hurricane? ***Why aren't they unfair when punishing the victim of a catastrophic illness?*** Why aren't they unfair when punishing someone who lost their job at Enron because the white collar criminals in charge drove their company into the ground? Everyone wants to fight fraud (the pretense for passing these cruel new rules), but if the new bankruptcy law is wrong when applied to victims of Katrina then it's wrong when applied to anyone, regardless of the catastrophe that has blindsided them.

If the Democrats had any backbone, they would push to overturn that law, using Katrina as a classic example of why it's bad. If the Republicans offer the compromise of delay, they should refuse on principle, insisting on full reversal. Let the Republicans explain why these people should suffer.



Comments (28) | Permanent Link |

[ret5hd]

13. "I'm a War President!!!"

[NYC]

16. 32% have a positive view of the economy.

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-09-13T205949Z_01_N13596118_RTRIDST_0_ECONOMY-CONSUMERS-ABC.XML

U.S. consumer confidence gauge drops sharply-report

...The percentage of Americans with a positive view of the economy fell to 32 percent...

...only 32 percent of Americans thought the buying climate was good...

[iconoclastic cat]

14. The changes in bankruptcy laws are going to blow this country apart.

Get ready for some serious hell.

[NYC]

18. Question.

Why? If the number of people declaring bankruptcy remained the same, I don't think it would.

However, with credit card minimum payments doubling, and the Bush economy, I would expect more people to "file for bankruptcy" if the old law still existed.

So will the new bankruptcy law "blow this country apart" or will the new bankruptcy laws draw attention to the Bush economy and the squeeze being put on people by the doubling of minimum payments? Would those two underlying causes be what blow this country apart?

(I think the doubling of minimum payments, faster repayment of principal, would be a good thing if it was not applied to old balances. Repayment should have been 4% instead of 2% all along. The way it is being done now seems designed to push people over the edge.)

Thanks in advance.

[iconoclastic cat]

19. "Drawing attention" would definitely be the upside.

[Theres-a]

20. Kick nt

[defiant1]

22. That's awful....

Why buy a laptop when you can access the internet from a library? Or make some friends with internet connections.

Don't spend 1,200 dollars on a laptop with no income coming in. That's just not prudent.

[Skidmore]

23. Could we get Dorgan and others of like sensibilities

to locate a few of these people and get their stories. Find out what their anticipated obligations are. They were told to leave, they listened, and got themselves to safety, and still lost everything due to negligence on the part of government--a failure to protect their city..