The Case for Walking Away

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  • Posted By: Cheyenne2 @ 01/05/2009 4:22:10 PM

    I hired a paralegal to do my paper work, and represented my self in court. It cost me $100.00 in 2003. At that time that was all a paralegal was allowed to charge.. Of all the attorneys present , the only thing they did was acknowledge who they were, & most people had paid a minimim of $500.00 for them to stand next to you.. I know of at least 3 other people who have done the same thing

  • Posted By: jasonwitt @ 01/05/2009 12:39:32 PM

    As a practicing bankruptcy attorney in Monroe, NC (Union County NC) it is great to see increased awareness of bankruptcy as an option. Too many people ignore lawsuits and credit card bills rather than consult an attorney- many bankruptcy lawyers offer free consultations. Also- bankruptcy whether Chapter 7 or Chapter 13 varies depending on circumstance and by state.

    jason@jtburnslaw.com
    http://jtburnslaw.com/
    www.jtburnslaw.com

    • Posted By: brydges @ 01/05/2009 4:08:41 PM

      and it doesn't hurt your pocket either - typical lawyer

  • Posted By: queenie @ 01/05/2009 4:01:41 PM

    Ms. Quinn - you are SO right. I wish someone would have told me this 5 years ago. After a couple of late credit card payments (late, meaning I paid AFTER 1:00 on the day the payment was due) Citibank raised my rate from 9% to 30% just like the other person said. I felt I couldn't survive without a credit card in case I needed to rent a car or had an emergency so I skipped a house payment to pay a ridiculous minimum payment along with their fees, etc. I've always paid my bills, never had any difficulties until George Bush's boys let the credit card companies do whatever they felt like to people. To keep my house, I ended up having to declare chapter 13 and am about to come out of a 5 year repayment plan. At the time I declared bankruptcy I had $40,000 in equity in my house but now I'm $50K under water in the house and can't refinance my 5-year balloon. So I'll end up losing the house anyway. I killed myself trying to live within the plan and pay back everything I owed (oh so honorable) to keep the house, and look where it got me. I say get stick it to the credit card companies - don't waste your life trying to be honest and decent because they're sure not doing that for us. Everything this article says is the EXACT TRUTH. All you judgmental people who are complaining about us who got into trouble - maybe you should look at your wonderful Republican government we previously had and thank THEM. The majority of people who are in trouble right now are honest, decent people who never did a thing to defraud anyone.

  • Posted By: no-win-situation @ 01/04/2009 8:32:11 PM

    Actually the bank can charge you 30% even if you are not in default. If you are behind on one card every other creditor has the right to raise your credit limit even if you are not behind on any of the loans to their institution.

    Also banks can raise the rate using sneak tactics that revolve around the time when you pay. If I set my bank to automatically pay a bill on the 14th and it is not processed until the next day after 12 noon when the bill is due on the 15th, some banks consider that a default. Some banks raise your rate by citing you carry too much debt (which they helped you accrue).

    Congress actually has recognized that banks are not playing fair and the laws have been changed to make them comply. After summer 2009 a bank won't be able to raise the default rate until you are more than 30 days past due and other banks won't be able to raise your rate if you default on another bank. I do not want to default on my debt nor do I want to go though a bankruptcy. Most bankruptcies are because of financial hardship often sparked by medical bills or an illness. I want to pay it back. I just want it to be in a reasonable amount of time at closer to the original terms. 5-10 years I can live with; 30 years or more at 30% I will not abide by I agreed to pay back this loan at 8% and have never been over 30 days past due..

    • Posted By: dj98908 @ 01/05/2009 3:56:01 PM

      This is exactly what bank of america did to us. We were not late, i paid on time (and have proof from my bank) but BofA didnt process it until the 'next' day. Because of that we were considered 1 day late, now BofA is charging us 30% and have more than doubled our monthly payments, froze our accounts, and now forced us into bk. I am not embarrassed, BofA should be. Banks are going through and doing this to MANY customers. For the record, we have NEVER been late, NEVER paid less than required, in fact usually paid more than required. I will hold my head high when I go in because I TRIED my best to dig myself out of our $76,000 hole of credit debt. Which was medical bills... because being self employed we could not afford medical insurance. to those of you that bash people like me for living beyond my means... walk in my shoes better yet, have the GUTS to go out and start your own buisness in small town America -- then come talk to me.

    • Posted By: dj98908 @ 01/05/2009 3:55:21 PM

      This is exactly what bank of america did to us. We were not late, i paid on time (and have proof from my bank) but BofA didnt process it until the 'next' day. Because of that we were considered 1 day late, now BofA is charging us 30% and have more than doubled our monthly payments, froze our accounts, and now forced us into bk. I am not embarrassed, BofA should be. Banks are going through and doing this to MANY customers. For the record, we have NEVER been late, NEVER paid less than required, in fact usually paid more than required. I will hold my head high when I go in because I TRIED my best to dig myself out of our $76,000 hole of credit debt. Which was medical bills... because being self employed we could not afford medical insurance. to those of you that bash people like me for living beyond my means... walk in my shoes better yet, have the GUTS to go out and start your own buisness in small town America -- then come talk to me.

  • Posted By: shakin34 @ 01/04/2009 9:29:25 PM

    This article came at such a perfect time for me and my husband. It has helped me make the big decision that my husband was just talking to me about right before I opened my front page. My husband was laid off in Sept. from a big airline that is closing it's doors. In the end there will be around 10,000 jobs lossed at this company. My family and I left our house and moved to our hometown in Sept. and since things just keep getting worse for us like for many others. I'm just devastated to think that this is our last option I cry everyday about the possibility of losing everything else we have left. I do think your right about our health being our future also and if I continue to stress about the mounting bills I will not be healthy for my children and they are what is most important. It's just very sad to know that people all over the U.S are losing things that have worked years and years to have.

    • Posted By: dcworks @ 01/05/2009 3:44:44 PM

      shakin34 - don't wait like I did - talk to an attorney and file if it makes sense to do so. I've tried for 3 years after losing my "good" job that I worked so hard for (15+ years experience in my field, well respected -- now employed but at 50K less) --- I've lost my house (short sale to avoid foreclosure), my cars, EVERYTHING. I spent my savings to try avoid the shame of bankruptcy -- now I have nothing. I've sold everything I can, including sentimental items -- and let me tell you something -- those credit card companies are heartless!! Raised my rates from 9% after 20 years to almost 30% with endless fees -- the more I paid, the more I owed. If you are going broke -- take action.

  • Posted By: sai_chai @ 01/05/2009 3:42:47 PM

    It is a sad day in a formerly proud America that this attitude, not ethic, has gained prevalence. Just walk away from responsibilities and let the chips fall where they may -on everybody else. You think y Good show, America. You think you are not hurting anyone. After all, it is only the evil banks, credit card companies, and large corporations you are stiffing. WRONG! You are utlimately stiffing the US taxpayer who must bear the burden of bail outs into the foreseeable future. Shame on you, and shame on the author of this article.

  • Posted By: Believe09 @ 01/05/2009 12:03:28 AM

    Somewhere in life our society has failed to learn that we are responsible for our own life. That means we can't have every shiny toy out there, unless we have savings to cover the purchase. Bankruptcy should only be used as a last ditch method for health and safety. Until a person has sold every item in their life, they should never be allowed to have a reset button that the rest of us must now pay. Where are the Newsweek articles on why one shouldn't shove their mistakes onto the rest of society?

    • Posted By: dcworks @ 01/05/2009 3:32:58 PM

      Lost my good job 3 years ago, but even with 15+ years experience and great references could only find one making 50K less. OK, I've sold EVERYTHING including sentimental stuff left to me by my grandmother, lost my cars (now driving an '89 with over 200K), (Public transportation? HA!? if it is available - you are lucky -- our city has it -- but it stops 2 miles from my office), emptied my savings, gave up my house for a short sale to avoid foreclosure, moved into a smaller rent house (but not paying much less than the old mortgage now) -- I found a new job, but still making less, with no health insurance -- what should I do NOW mr. smartypants?? I can now only cover the rent, utilities and food-- no extras, no fun, for more than 3 years now --- (my kids both think their name is "NO" ) -- cannot work a part time job because I do sometimes travel for work (really a challenge w/o a credit card) ....what now??? Credit card companies raised my rates when I lost my job from 9% to almost 30% with endless fees for over limit, late charges, whatever they felt like (I was a great customer for 20 years)....Debt only increased -- the more I paid, the more I owed -- I went through CCCS -- helped some, but really, they told me what my budget was - not what groceries and gas really cost...Daughter developed a mysterious viral infection that lasted months -- tests cost $$ - Husband had to leave his job to take care of his ailing parents....what now??? I had to just stop paying the credit card companies long ago. They showed no mercy. Do you have a plan for all of this mr./ms. smartypants???? (Yes, I'd love to go back to school, but that costs money.) And DID I MENTION? I've worked EVERYDAY - except for the 3 months it took me to find a job -- spent those days looking for a job 8+ hours a day) ---- Just pray it never happens to you. Pray hard -- maybe you will be heard.

  • Posted By: bdick @ 01/05/2009 12:05:15 PM

    Let us stop beating up on our neighbors and show some support for those that have really gave it all they had and then some that ultimatley made our economy boom! Why not give a dollar for dollar tax break to people in dept for living expenses, for purchasing American cars, smoking, drinking, eating out, buying clothes, having there teeth cleaned, etc. That way the trickle down economy minds can be happy and the people trying to climb out of the dark ages can get a look at some day light and more money will be usable to help our struggling home owners! I wonder if I am considered one of the smarter Americans after all I just solved the problem.

    • Posted By: FlyDutch @ 01/05/2009 3:06:28 PM

      Are you being sarcastic? Overspend to save the overspenders? No way! We should not spend our way out of this, rather we should become a nation of debt-free savers who will have more disposable income down the road, instead of keeping these sleazy financial institutions in business with a debt-ridden lifestyle.

  • Posted By: Believe09 @ 01/05/2009 2:54:51 PM

    Again, two wrongs don't make a right, take personal responsibility, don't say "they did it, why not me"...

  • Posted By: JoeandBecky @ 01/05/2009 11:55:00 AM

    Are you kidding?? I have worked over 30 years and have lived well within our means and why do I have to pay for dead beats to overspend and I pick up the bill!!! We live with one car, one house and 30K a year and have raised 2 kids. You people are just damn lazy and stupid! How dare you incourage them to do this and make my prices sky-rocket. Remember the career choice you made and live with it. No wonder the country's finacial house is burning down.

    • Posted By: NJ-BJ @ 01/05/2009 2:45:56 PM

      JoeandBecky,
      Are you talking about people or AIG, Bear Sterns, and GM? Both groups have declared bankruptcy; you will pay for both. Are you making a distinction here or is bankruptcy only bad when individuals use it? What about all the jobs and wealth which has been destroyed by the bad behavior by companies who still give bonuses, go on Sales boondoggles, etc. You can bet they do not spend every last dollar before they declare bankruptcy.

  • Posted By: miamijer @ 01/05/2009 2:40:07 PM

    Most people in this mess spent more than they made, using home equity lines of credit and credit cards to live "the good life". Many homeowners refinanced their home until they ran out of equity, and now can't afford the payments. Exotic mortgages with low teaser rates didn't help undisciplined or uneducated borrowers, either.

  • Posted By: el_Strockito @ 01/05/2009 11:08:33 AM

    Bankruptcy doesn't happen over night. A large majority of those who arrive at this point have done so because of poor economic practices and bad fiscal habits. Filing for bankruptcy will not automatically eliminate these habits, which means that the majority of those who do file will most likely return to their ways. For these people, bankruptcy is merely a "restart" button in the game of personal finance, a game that they have not mastered. Bankruptcy is not the solution but only adds to the country's economic problems, enabling irresponsible tendencies and lack of self-discipline. Those who may be thinking about bankruptcy as the solution may want to rethink their decision and consider what it will take to overcome the real problem(s) be it uncontrolled spending, poor budgeting, "gotta have the latest tech toy" syndrome, or what-have-you. Figure it out, fix it and avoid what you "think" is inevitable (i.e. bankruptcy).

    • Posted By: NJ-BJ @ 01/05/2009 2:34:01 PM

      Most bankruptcies are caused by medical problems. How do you suggest they rethink their habits? Do you consider organ transplant, diabetes treatment or cancer treatment uncontrolled spending, poor budgeting or "gotta have the latest tech toy". Please tell these people how to "figure it out, fix it, etc. I'm sure they would appreciate it.
      Now for the minority of those filing for bankruptcy, if there was choice or malfeasance in their debt accumulation, then they need to pay off their debts or send back to kindergarten to learn how to budget. Sadly, this will not help most of those filing. The point of the article, by the way, was that if you must file, don't wait until all your resources have been exhausted.

  • Posted By: davescave @ 01/05/2009 10:37:40 AM

    You signed up for your debts. Chances are you knew better and let someone talk you into it because you WANTED that big shiny new THING. Now you don't want to or can't afford to pay for it. But, your name, your credit rating, and your reputation are on the line. Maybe that doesn't mean anything to you. But remember, SOMEONE is going to have to pay the bill if you don't, and it won't be the mortgage lenders, credit card issuers, or banks, it will be me. I'm one of those stupid tax payers who add up their income and subtract all their bills before they borrow. Is that so hard to do? So, thanks a lot if you file for bankruptcy. Those billions of $$$,$$$,$$$,$$$.$$ the government is using for bailouts is the debt of me, my children, my grandchildren, and yours. The government produces nothing. We do! Suck it up and pay for your previous mistakes. Be a man, that's the only way you can respect yourself and return this country to greatness.

    Whoever wrote this article is WRONG. This type of thinking is why we're in a mess now. Don't you be the one to make the problem worse.

    • Posted By: NJ-BJ @ 01/05/2009 2:21:13 PM

      Most bankruptcy is caused by bills from major illness, not people buying shinny new things.
      My read on the article is not that it was promoting bankruptcy as an answer, but if someone decides that might be the answer, do it before you run through all of your available assets. Is it your position that if a person must file bankruptcy, that they should first liquidate all assets, remit all funds to creditors, then file? I thought bankruptcy was available to protect assets. If that is not the purpose, then it just seems to be to put the final nail in the coffin and alert the creditors that all resources have been exhausted and it is a waste of their resources to attempt to collect additional repayment. Your comments, please.

  • Posted By: creditinfocenter.com @ 01/05/2009 2:02:29 PM

    In most cases, a bankruptcy is not necessary. If I had it to over, I wouldn't have filed. Like the author said, it stays on for 10 years, and that is a killer for your credit. You can't get a good loan on a house for 4 years, a car loan, and forget getting a credit card for 10 years. It would have been easier (and the same net effect of getting rid of your debts) to just not pay and deal with the phone calls for 6 months to a year. But my credit wouldn't have taken such a hit.

  • Posted By: pdskep @ 01/05/2009 2:01:04 PM

    A slimy lawyer weighs in..great!!!

  • Posted By: Polly333 @ 01/05/2009 12:04:50 PM

    This advice is wrong. We must all take responsibility and not expect other people to foot the Bill. Someone has to pay off all the creditors, which means higher charges to the inocent people who mke sure they are not over stretching themselves.

    Making obtaining Credit more difficult to come by will be a blessing, as it is so easy to tick the boxes on Application Forms to obtain Credit cards with thousands at our disposal.

    To say," Oh well! I will just go Brankrupt" is giving the already "couldn't care less generation" another reason to stop trying a little bit harder! I bet in a Poll most of those who have had to consider this option are under 25 and have everyhting that they have ever wanted..not needed..at the flick of a card.

    So come on you academics....be more sensible before you suggest the easiest option or we will never learn!

    • Posted By: cschene @ 01/05/2009 1:17:06 PM

      I declared some years ago: I had a perfect credit rating but when I got divorced my debt ratio jumped to 55% because of the legal fees and support payments, I went to CCC (Consumer credit counseling) and they suggested a second job. I looked at my options and felt I would never have time to spend with my children if I worked a second job: It was also never ending, it would taken over 5 years to work my way out of it living on a shoe string all the time and I would never be able to save a dime for retirement and I protected my retirement accounts as well.

      I declared and was amazed at how little difference it made in my life: my credit was terrible for a few years, but after 3 years I could obtain a mortgage and a 17% car loan. I now have an 800 FICO score

      I paid back EVERY creditor that agreed to a plan that I felt I could live with (doctors, lawyers, dentist, etc) but the banks would not play ball, so they lost out! I feel no obligation what so ever to pay them, but I did feel obligated to pay those who would cooperate with me. It took me about 14 years of payments to pay those who cooperated back, but I was also able to save for retirement as I did this.

  • Posted By: bdick @ 01/05/2009 1:04:10 PM

    Of course bankruptcy lawyers are advocates for bankruptcy- no different than a drug dealer pushing the idea that heroin is good or a drug company advertising that viagra feels good. Your article got the suck part right!

  • Posted By: Believe09 @ 01/05/2009 12:56:05 PM

    Lawyers make money on both sides of the coin, they create the mess, and we have to pay them to clean it up. If BK can be used as a reset button, how about a reset button to undo self serving laws by lawyers...sorry, wrong topic.

  • Posted By: American rebel @ 01/05/2009 9:14:30 AM

    dumbluckagain @ 01/05/2009 8:56:16 AM
    McCain was going to help strapped home owners with a bail out- The MSM and Everybody said it was stupid.

    Obama is gonna give you a tax credit.

    Whoopie do! What good is a tax credit if you don't have any money?

    Even after they get elected- Democrats are still dumb!

    Your home? Maybe BK? Then
    try to get a friend/relative buy it at reduced cost from the BKs bank sale- then buy it back.
    maybe......
    Good luck.

    • Posted By: NJ-BJ @ 01/05/2009 12:45:20 PM

      McCain's homeowner bail out would have stuck the government with the difference between what what owed (the original mortgage) on the home and what the new, reduced value was. Since we need to raise taxes to pay for that gap, how would this have helped? The banks, meanwhile, would have walked away with the full value of what they should never have lent anyway. Would you loan anyone $100,000 to purchase a $45,000 house? If you would, it it your mess to clean up/explain to your shareholders.

    • Posted By: jabm0495 @ 01/05/2009 9:24:19 AM

      Enter Your Comment

  • Posted By: jasonwitt @ 01/05/2009 12:39:02 PM

    As a practicing bankruptcy attorney in Monroe, NC (Union County NC) it is great to see increased awareness of bankruptcy as an option. Too many people ignore lawsuits and credit card bills rather than consult an attorney- many bankruptcy lawyers offer free consultations. Also- bankruptcy whether Chapter 7 or Chapter 13 varies depending on circumstance and by state.

    jason@jtburnslaw.com
    http://jtburnslaw.com/
    www.jtburnslaw.com

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