THE VALLEY OF THE SHADOW OF DEBT

[undergroundpanther]

# The credit card industry took in $43 billion in fee income from late payments, over-limit, and balance transfer fees in 2004, up from $39 billion in 2003. In 2005, however, credit card late fees alone totaled over $11 billion.
# Total American consumer debt reached $2.2 trillion in 2005.
# Total American household consumer debt averaged $11,840 in 2005. As of July 15, the war in Iraq costs over $2,600 per household in the United States2 Taking into consideration the $4 trillion “missing” from the U.S. Treasury as documented by Catherine Austin Fitts and others3 the average debt per household for missing money alone is $14,000; therefore, including missing money, the Iraq War, and general consumer debt, the sum total of household debt is, in fact, over $28,000.
# Average household credit card debt has increased 167% between 1990 and 2004....



But what does the new bankruptcy law actually say? How specifically, does it close and seal an escape hatch for individuals and families suffocating in debt?

Some of the most brutal and egregious provisions are:15

* Bankruptcy filers must attend credit counseling at their own expense. This has given rise to a new industry of highly-profitable, predatory credit counseling services who promise to virtually erase one’s debts, as if by magic.
* Under the new laws, in many instances, debtors are restricted to monthly living allowances mandated by the IRS, regardless of individual circumstances upon the same quasi-criminal standards used to prosecute unpaid taxes.
* Under the new laws, in some cases, debtors are required to live under court supervision with all disposable income applied to the full payment of all debts for a period of five years or until paid in full.

http://www.fromthewilderness.com/free/ww3/081106_valley_debt.shtml

[JDPriestly]

1. Modern day indentured servitude

Slavery is next.

[originalpckelly]

2. Why shouldn't someone go through this if they have massive debt?

For anyone whose debt is not food, medical or education related, I don't see why any of the following is bad, except charging people who are poor for credit counseling, I think that it might be nice for them to get it free. If you have been irresponsible enough to rack up lots of debt and have no self control you should have to pay back your debt.

* Bankruptcy filers must attend credit counseling at their own expense. This has given rise to a new industry of highly-profitable, predatory credit counseling services who promise to virtually erase one’s debts, as if by magic.

* Under the new laws, in many instances, debtors are restricted to monthly living allowances mandated by the IRS, regardless of individual circumstances upon the same quasi-criminal standards used to prosecute unpaid taxes.

* Under the new laws, in some cases, debtors are required to live under court supervision with all disposable income applied to the full payment of all debts for a period of five years or until paid in full.

I say this as someone who has lived in a household that went broke because of debt, and it was mostly lack of self-control. My life sucked when I was younger, and it was all because of cheap pointless crap.

Americans need to learn some self control. We buy a lot of things that we don't need. This nation is screwing itself, and mostly because we don't have self control.

[Tandalayo_Scheisskopf]

3. I agree, in part...

That Americans buy too much crap they don't need on credit. That said, anyone can see that the problems are largely the fault of credit card companies flooding people with good credit with new cards and lines of credit. The impulse control problem has been caused, aided and abetted by an irresponsible credit industry.

Perhaps some laws that cap credit card limits per consumer or household, per income, are in order? For more credit, they can go see a bank and get a loan, if they qualify.

[undergroundpanther]

7. holier than ?

Oh come on.. do you realize the bulk of americans in debt are WORKING POOR? ONE hospital visit CRUSHES them. 1. I am SICK of self rightous ignorance out of middle or upper class people who feel they are superior over finances. It's disgusting.Screw the"just world Fantasy"..horatio.


It is so easy to judge how others manage money from afar,by looking at the balance sheet and ignore the human elements. So easy to SPREAD THE SHAME..I'm talking about the hypocrite self righteous fiscally responsible crowd.
http://journals.democraticunderground.com/undergroundpanther/41

Lerner's Belief in a Just World theory presumes that persons either believe that the world is a just place and that people get what they deserve, or that the world is not a just place and that events occur by chance (Lerner, 1980). Those with high just-world beliefs attribute poverty and other negative circumstances to one's behavior and personal characteristics, concluding that the poor person somehow deserves to be poor. The person's economic status is due to something the person did or failed to do, therefore they deserved it or had it coming. Many studies have correlated just-world beliefs with attributions and/or attitudes with some success (Bullock et al., 2001; Cozzarelli et al., 2001; Furnham, 1982).
http://journals.democraticunderground.com/undergroundpanther/45

[Lydia Leftcoast]

11. I've been trying to zero out my credit cards for years, but

whenever I start getting close, either the car breaks down or I need something medical or dental.

[JCMach1]

13. And where does most of the debt come from when people file bankruptcy?

Medical bills? Illnesses? Divorce?

This system does not allow for second chances and forces someone to be a slave of the court!

You want that?

Not in America! The Bill is total crap from start to finish...

Thanks for repeating the Repug talking points...

[FormerOstrich]

16. You really don't have a clue, do you?

I didn't file for bankruptcy, but should have. One of the biggest mistakes I've ever made.

However, let me tell you about the credit card and other sharks that the bankruptcy bill was written for.

I had what was considered marketable skills, a great career, and very little debt (but a lot of credit) when suddenly the rug was pulled out from underneath me.

When you start struggling to pay your credit card debts, they rightfully lower your limit. But..they lower the limit under what you owe them. Then they start charging you over limit fees.

The sell your debt and the ruthless collectors are willing to break every fair collections law there is. Not only that, if you are stupid enough to try to "do the right thing" and keep paying on the debt (growing exponentially) suddenly another agency will call and start attempting to collect the same debt. What you've been paying just seems to have been absorbed into a big black hole. Quit paying all together you'll get sued. Granted some of the plaintiffs won't be able to produce a shred of evidence that you have any sort of agreement with them, but you still have to pay your attorney to make it go away.

Get a little behind on your mortgage and the mortgage company can decide they won't accept "partial payments". Which means you have to pay everything in arrears or they'll just not cash your payments. They won't work with you. When your house goes into foreclosure there is about $5k + fees and bullshit added. Geez, suddenly your mortgage company will work with you. They'll add all that back into the loan....yadayadayada.

Of course, that would be if you haven't been imprisoned for injuring one of the zillion vultures that descend upon you when your house goes into foreclosure. People just drop by night and day to "help you" (like help you into the street).

I am usually not one easily provoked. However, I seriously lost it one night on a couple of them. I threw my phone to my Niece and told her to call the police because they were going to need them and I meant it.

Have a bit of a struggle and watch how everyone starts gouging you. I missed paying my car insurance. I was two days late (from the grace period). I had been a customer for eighteen years. For eighteen years I had never, not once, made a payment late. Well, they canceled me and to "reinstate" my policy doubled (yes, doubled) my premium. I feel pretty confident in saying had my credit not been looking so poorly my agent could have found a way to reinstate me with a policy increase.

I won't even bother to start on the many other ways you get legally raped when things to bad.....

I went from very little debt to crushing amounts of debt in short order. It's not a level playing field. The only winners are the vultures.

All in all, I am pretty damn fortunate and even though it will be years before I recover (if I ever do) I am stabilizing. That's because I had a lot going for me (i.e. marketable skills, resources to consume, etc). I can understand how many don't make it through. I damn near didn't. It is a stacked deck...don't kid yourself.

In other words (and this is really rare for me to say) STFU. Take your pull-yourself-up-by-your bootstraps, you must have been a glutton, attitude and peddle it far away from me.

[Viva_La_Revolution]

4. debtors prison

2006 style.

[Union Thug]

5. This is the kind of shit that starts revolutions. Keep pushing it, a-holes

[undergroundpanther]

8. I for one agree

Eat the rich.

[sarahlee]

6. Sad and scary

Still I thank you for providing the info.

[razors edge]

9. High UP

I had to pull a bankruptcy before the new laws last year, got in under the deadline. Those who hold large amounts of debt like I did (15,000) on credit cards are screwed. One late pay to one card will send all cards to a 21%+ rate and push them to this new system very quickly.

What do we post at the fence to tell the New Age Hobos they can get some food here? We already feed about twenty of the friends kids who can't find work.

I have taken advantage of my new financial situation to help the local shelter a lot more, and stocked up on canned goods to boot.

City dwellers will be hardest hit, and east Toledo is seeing it already. I have guys I have known and found work for in the past begging for work and I just don't have it any longer.

When they Finlay disappear, I wonder if we wont see them again later at some point, wearing a wackenhut uniform guarding the ADM fields from the dispicable hungry?

I bet the new army will travel on it's stomach too.

[On the Road]

10. Unfortunately,

The very first number mentioned is implausible.

The credit card industry took in $43 billion in fee income from late payments, over-limit, and balance transfer fees in 2004....

Assuming 227,000,000 households (www.census.gov projection), that means the average was roughly $16/mo, or $190/yr. That is an average -- what fraction of the people you know pay $190 only in those fees? It it applies to only half the population, double those numbers to $380/Mo or $32/yr. The figure might be credible if it includes interest.

I would like to have some more specifics on the supposedly missing $4 Trillion, and to know why the word "missing" is in quotes.

I oppose the bankruptcy law, too, but don't know seriously to take the rest of the article.

[NVMojo]

12. we can thank Harry Reid and other Dems for this stuff ...they sleep

well at night too. Jerks.

[kineneb]

14. went through Ch. 7 this summer

Actually, the bad parts of the new laws affect those who have decent incomes and assets. For the truly poor, the only difference is the stupid credit counseling. We had $60K in debts and only Hubby's SSDI to live from. With financial help from my family, we were able to dispatch those debts. We now have only the mortgage (all of $167.50/month), no credit cards, and most importantly- no debt. It is not as if we would have been able to pay the debts off while living on disability checks.

The cause for our bankruptcy was typical: unemployment (WorldCom) and health failure (dialysis).

[Nutmegger]

15. Of course

and the amendments introduced to protect those dealing with the above issues were rejected. Thanks Congress! :hi:

[MadHound]

17. Pay off your credit cards, cut them up, and don't get anymore

Go to a completely cash/check/debit card basis. I have made this a strict rule in my life, and it has worked well. I've never had any problems, traveling, renting cars, checking into hotels. It has served me well through thick and thin, my credit rating is excellent, and the only debt I have to worry about are the bills and the mortage.

We whine and moan about all of the excesses and wrongdoings concerning the credit card industry, well let's cut up that plastic and cut the credit card corporations off at the knees. Plus you do your own personal budget a world of good by taking away the temptation to "just charge it". Forty years ago the vast majority of Americans did just fine without plastic, and we can do so again. It's just a simply matter of cutting them up and tossing them away.