Slaves to Credit -- Giving Up Your Life One Loan at a Time.

Credit cards are a trap. If a payment is late the interest rate soars--on some cards it goes up to 28 percent. A few years ago a long illness made it necessary to declare bankruptcy, so needless to say my credit is ruined for 7-10 years. I have found, since then, that I can live on much less than I would have thought before I became disabled. I'm getting along with just a modest income and a debit card. I rent, pay electric, water, telephone and cable and have a bank account, all without a credit check. I grant that buying a car or a house would be more difficult. A friend in my same situation recently bought a house, but her mortgage rate is much higher than it would be if she had "good" credit. Before my bankruptcy I was deluged with offers of "pre-approved" credit cards and am still getting them, though I wonder why anyone in their right mind would extend credit to me now. The credit card companies are making out like bandits, with interest, late fees, overlimit fees, annual fees and other charges. I am happier now that I am credit card free.

Wow. I can feel where most of you are coming from with the credit thing ruling your life. I'm not asking for sympathy here, but I just wanted to share something.
My husband and I went through the credit card thing. We got Sam's Club card, Target card, and a few others. It looks really nice to see a minimum payment of $15-35 bucks. I made $10 an hour plus my husband made $13 an hour. But those $15 bucks add up. And then disaster strikes and you're not prepared.

Anyway, we had to declare bankruptcy. We screwed up bad and are now paying for it by living a boring, sub-standard, and probably unhealthy lifestyle.

My husband makes $10 an hour and supports our 11 month old son and myself. Not to mention 2 cats and 4 parakeets. And no, we are not on any type of welfare, foodstamps, government insurance, nothing. We went from living in a brand-spanking new apartment complex with every last amenity, to living in a tiny, beat up(previous owners), 2 bedroom trailer. The hallway and bedroom still have plywood subflooring and the hallway's sheetrock is ripped to shreds, insulation coming through giant holes.
We had a completely paid off Chevy Cavalier who's motor blew up, and now we pay $183 a month on a Focus. That's $57 towards principal and $127 in interest, because of the recent bankruptcy, no doubt. We'll pay this car off three times before we actually pay it off. Our insurance went from $65 to $135.
Besides lot rent, which is $325 per month (we own the trailer, in-laws were gracious enough to "lend" us 4k to buy it) and the car expenses, we only have a cellphone bill and an internet bill now.
We do not buy dvds, cds, or clothes. We don't go for rides, to the movies, or any type of outings. We do not buy "luxury foods" like ground beef or fresh vegetables. We live on ramen noodles, pastas, rice and potatoes. I stay in the house all day long caring for our son, and my husband works and comes home. Then we go to bed.
We have no more credit cards of any type. We have 5 bills. We live surprizing comfortably, money wise, as long as there's no type of entertainment (although one can consider the internet entertainment, I suppose).

Now I'm not blaming anybody for this. It's our fault for ruining our credit. Nor am I throwing a pity party. "Waah, look at how terrible we live."
I just wanted to share that it is quite possible to support a small family on 1 income of $10 an hour. Of course it's not a desirable way of life at all, but it has helped us learn not to be consumers, to budget, and to just do without stuff. It'll help us keep our balance better, too, when we get back on our feet.
It boggles my mind sometimes how people can make almost $20 an hour and still run out of money. And sometimes this is only 1 of the family's 2 incomes. I guess I just get a little upset when I hear about all these people (not necessarily on here) who live in $100k+ homes, drive 2+ cars and talk about financial hardships or how they just can't lower their standards any farther. Bull. Standards can get pretty low. Your meager 3 bdrm house is a friggin palace in my eyes.

Credit is like fire, methinks. It gives you heat and cooks your food. But sometimes it can burn and kill you. I wish we had never played with fire. Lesson well learned here.

Sorry, just wanted to share my experience/thoughts.

reply to post by undo

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I do use Firefox now. I don't think I will go back to that other one......what's it called???? I have a lot less trouble now.

Veilibi

in florida, even dinky houses are expensive. but the expense of your home is only going to be beneficial if there's a market to buy it. if the only market is lenders asking you to refinance with them, that's not a market. if there's no market, you won't be able to realize the advantages of a property that continues to gain in value. it'll just create more debt in property taxes and more offers to refinance it to the hilt since its worth so much more than you owe on it. but if it's worth more than you owe on it and not because you've paid that much in principal but because the market went bonkers in a short time ..... it's an increase in price that has no real value and in essence becomes a bigger debt in the form of additional property taxes.

when we bought this place, it was an attempt on the part of my hubby to lift my spirits as i had just underwent a full masectomy. in addition, our home before the move, was a rental property that had no heat in the winter and no air in the summer. the plumbing was leaking and it was infested with coach roaches. a nearby radar dome caused a few unpleasant problems as well. to top it off, my elderly mother who had advanced alzheimers, was living with us and getting progressively sicker. it was nigh on impossible to take care of her while recovering from a major surgery, in the florida heat in the warmer months, which is actually very hard on the elderly to begin with.

his heart was in the right place when he bought it. now, i'm so ill, it would be incredibly hard on me to move. i can't live in a cold climate as chronic bronchitis would keep me in the hospital with pneumonia all winter long. conversely, my body's energy shuts down when the heat rises above a comfort zone. apparently the device that regulates body temp (hypothalamus) is not working quite right (related to damage from the encephalitis that put me in coma about 15 years ago).

the really crazy thing is, if we were to claim bankruptcy and let the property go back to the bank, there would be few, if any, places that would provide the same health benefits for less money. also, eating and/or eating properly is very important in combating illness. as a diabetic, i can't survive on ramen noodles and rice. as a cancer and coma survivor, i have alot of residual damage to nerve tissues, compounded by the diabetes and diabetic neuropathy. to make a long story short, if we can't maintain enough income to buy the needed foods/meds and living conditions necessary, he'll be visiting me in the graveyard instead of the living room.

[edit on 23-10-2007 by undo]

South central about 45 miles from the Florida state line.



I'll ask him when I see him.


I would love to get an angel investor too. If you find an extra one, send him my way. I asked a guy I know that worked for a senator at the time about getting a grant for for alternate energy development. He told me to not bother because those only went to corporations.


Every year, before the problem with the loan officer, I would go to the bank and borrow $250,000+ and also get about that much credit from the businesses that I delt with. The standing joke among us farmers is that we sell our crops and take our money to the bank and give it to them and they would be standing there with their hands out wanting to know where the rest of the money that we owed them was. That would be a funny joke except it's true.

On average, they said that I got about $20,000 /year in subsidies. This sounds like a lot of money, and it is, but this amount would maybe pay my fuel bills for the year at the time, now it wouldn't. People complain about us farmers getting subsidies, but we could not survive without them. All they are is the government recognizing that when we plant a crop they know that we have no way of making a profit and they know we have to stay in business for the security of the country. We feel like it is welfare and it is, but we WORK FOR IT. Not like the guy down the road that gets a check, his four kids did get a check, only one now. He takes his check and buys crack and liquor, trys to get as much as he can of his kids check and would pimp his wife out for crack.

Maybe it worked this time, but its a lot shorter.

From personal experience, I found it humorous when you said "those who live in $100K+" homes. I personally know a couple people who make, per year well in excess of $100K and barely make ends meet. They literally live paycheck to paycheck.

Its all about life style choices. These guys live the same way you used to live except instead of buying Old Navy they buy Gucci, instead of driving a Cavalier they drive a Benz. IF bad luck strikes them, theyll be in the same boat as you.

Until you start making more than you can possibly spend ANYONE can go broke with bad money management skills. For haven sakes even the "King of Pop" Michael Jackson had to auction his house off and sell his memorabilia. Guy could be a billionaire if he didnt decide to put roller coasters in his backyard.

The problem is todays MTV driven lifestyle. Everyone wants to be a celebrity. If they cant be one, they want to look and act like one. They end up trying to live like a celebrity on a $10/hour wage. At some point its gotta stop.

This country hasnt been in a real recession in almost 2 decades. I can tell you when the next one hits, all this drive to be someone your not will end. People will smarten up a bit. It will hurt but we as a people will wake up and discover that there is more to life than how much you can buy.

reply to post by surf911

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haha sorry, had to do it in response to your post.

Forgive me please.

"Rockstar" -- Nickelback

I'm through with standin' in line
To clubs I'll never get in
It's like the bottom of the ninth
And I'm never gonna win
This life hasn't turned out
Quite the way I want it to be
(Tell me what you want)

I want a brand new house
On an episode of Cribs
And a bathroom I can play baseball in
And a king size tub big enough
For ten plus me
(Yea, So what you need)

I need a credit card that's got no limit
And a big black jet with a bedroom in it
Gonna join the mile high club
At thirty-seven thousand feet
--(Been there done that)--

I want a new tour bus full of old guitars
My own star on Hollywood Boulevard
Somewhere between Cher and
James Dean is fine for me
(So how you gonna do it?)

I'm gonna trade this life for fortune and fame
I'd even cut my hair and change my name

[CHORUS]
'Cause we all just wanna be big rockstars and
Live in hilltop houses driving fifteen cars
The girls come easy and the drugs come cheap
We'll all stay skinny 'cause we just won't eat
And we'll hang out in the coolest bars
In the VIP with the movie stars
Every good gold digger's
Gonna wind up there
Every Playboy bunny
With her bleach blonde hair
And well...

Hey, hey, I wanna be a rockstar
Hey, hey, I wanna be a rockstar

I wanna be great like Elvis without the tassels
Hire eight body guards that love to beat up a*holes
Sign a couple autographs
So I can eat my meals for free
(I'll have the quesadilla, on the house)

I'm gonna dress my ass
With the latest fashion
Get a front door key to the Playboy mansion

Gonna date a centerfold that loves to
Blow my money for me
(So how you gonna do it?)

I'm gonna trade this life
For fortune and fame
I'd even cut my hair
And change my name

'Cause we all just wanna be big rockstars and
Live in hilltop houses driving fifteen cars
The girls come easy and the drugs come cheap
We'll all stay skinny 'cause we just won't eat
And we'll hang out in the coolest bars
In the VIP with the movie stars
Every good gold digger's
Gonna wind up there
Every Playboy bunny
With her bleach blonde hair
And we'll hide out in the private rooms
With the latest dictionary of
Today's who's who
They'll get you anything
with that evil smile
Everybody's got a
Drug dealer on speed dial, well
Hey, hey, I wanna be a rockstar

I'm gonna sing those songs
That offend the censors
Gonna pop my pills
From a Pez dispenser
Get washed-up singers writing all my songs
Lip sync 'em every night so I don't get 'em wrong

Well we all just wanna be big rockstars
And live in hilltop houses driving fifteen cars
The girls come easy and the drugs come cheap
We'll all stay skinny 'cause we just won't eat
And we'll hang out in the coolest bars
In the VIP with the movie stars
Every good gold digger's
Gonna wind up there
Every Playboy bunny
With her bleach blond hair
And we'll hide out in the private rooms
With the latest dictionary of
Today's who's who
They'll get you anything
with that evil smile
Everybody's got a
Drug dealer on speed dial,well

Hey, hey, I wanna be a rockstar
Hey, hey, I wanna be a rockstar

-----


It's true that too many people do try to live beyond there means and that's just sad.

What's even more sad, however, are the people that have to get credit cards just to put food on the table because their wage doesn't pay for the necessities.

These people live in a cracked out shotgun house in a horrid neighborhood and drive a busted up Pacer all while working 60 hour weeks.

Inflation, partly caused by people that CAN afford to paying outrageous amounts for JUNK, is killing the lower to middle classes. It's disgusting.

I yearn for a time when we can live comfortably even if we DO have to take a job making minimum wage.


Let it all come tumbling down and see how those fat cats like dumpster diving.


Jasn

reply to post by undo

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Your case is EXACTLY what I meant when responding to the morons earlier.


Nothing (and I mean NOTHING) will put you in the "poor house" faster than medical emergencies.

Yet, because it has not happened to them, some of the previous responders to this thread feel that it simply cannot happen.

Some people seem to live in a fantasy world where the ONLY reason for financial hardship is bad decisions on your part. They don't seem to realize that health and dental insurance aren't the godsends they appear to be at first. These companies try everything in their power to get out of paying the bill and if they ARE forced to pay out, they cancel you and leave you on your own to die or go broke.

I'm willing to bet that at LEAST 70% of financial hardship in this country isn't the result of stupid overspending as it is people having to borrow just to keep food on the table.

When you honestly take into account how much money IS required of the average family every month in opposition to their monthly pay, is it any wonder so many people turn to credit cards?


As I said before, it's a scam and it's DESIGNED to hurt the lower and middle classes.

Many of them are all but FORCED into the lifestyle of credit cards until they are dried up and then even the credit card devils won't touch them.


Jasn

reply to post by Ninja-san

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I read this post and your previous one thoroughly.

You misrepresented what I said either purposely or through not reading what I actually had said.

You basically said I was a liar for saying that I received credit at 16 when I never said I received credit at 16.


Also, I have a very good education and am not currently in debt. Therefore, I'm not really sure who the rest of your post is directed at. Just because my credit isn't perfect now, does NOT mean I'm in debt to anyone. I haven't told anyone on this thread of my current financial situation and if anything I have said has lead you to believe otherwise, I apologize for possibly mistyping.


As I said, you didn't read before you posted. You ASSUMED you knew the situation and based your response off that.

I understand how debt works very well and have actually done the same job you say you do on various occasions.


The message in this thread is how 10 years of VERY VERY good credit history is NOTHING in comparison to 3 months of bad.


I have said, time and time again in this thread, that your credit score says NOTHING about you as a loan risk.

Yes, there are some people who DO purposely abuse their credit and have no intention of paying. However, for each of those there are 10 more who have every intention (and means) to pay the loan back but can't get it because of 3 stupid numbers.


Jasn

it's easy to see how this kind of thing can happen. it's usually a chain of events

for example, as soon as we got in the house, the military sent him to korea. i was still recovering from the masectomy and mom was getting worse. she had to wear diapers, was wheel chair ridden and didn't know who any of us were. we had to lift her up and put her in the tub to bathe her. then lift her out again. she had to have special foods that she was willing to eat, because she wouldn't eat much of anything else due to her alzheimers. anyway, she was very ill and frankly, so was i. so, without him here to help, i resorted to buying food to be delivered for the kids, because i was too sick to shop, drive, pay bills, cook meals, maintain the house and care for my mom. we spent a small fortune on chinese take-out (delivered) and pizzas (delivered). all of it went on the credit card.

we did try to stop them from sending him to korea, but they claimed i had had enough time to recover and the cancer doctor agreed (he didn't tell them i'd need chemo. he waited till hubby was in korea, then he called me and said i'd need chemo immediately.)

so the red cross had to yank him out of korea and send him home. when that was done, they sent him to baghdad, downtown, at saddam's palace, at the beginning of the war. mom was even sicker than before, and i was having all kinds of problems, including the onset of undiagnosed diabetes. so, back to buying food on credit card. mom died in our house, while under the care of myself and hospice, while he was there. (She was almost 90). so then there was the grieving over the loss of mom as well as fear for hubby's life. so even more purchases to credit card, like meds to deal with pain, anguish, anxiety, grief, etc, and vitamins, veggies and fruits to boost my failing health.

anyway, it's just not possible to prepare yourself enough for these kinds of things, even if we had been able to, it would've still been rough. and everything seemed to have a graduating scale of escalation. compounding problems. all of them expensive. all of them life threatening.

i could've refrained from making the credit card purchases, but i was simply too ill, and we would've basically starved to death in the house, that's how bad it was.

you gotta know, there are other people who have had similar runs of horrible events, that also had to rely or decided to rely, on credit for whatever reasons. so althouigh they did make the decision to live beyond their means, you have to wonder if the alternative would've been acceptable..

i don't think it would've been. i love my family.

reply to post by Areal51

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I agree fully with your perspective. Your attitude towards debt and credit is one that a lot of people could learn from. As I said before, I'm in (almost) full agreement that nobody should be spending money that doesn't belong to them. It's a recipe for a disaster.

If you're able to buy a home where you live for $180,000, I envy you. Here, a small 2 bedroom appartment in a "not-so-nice-area" will cost you £120,000 ($240,000). In addition, my girlfriend and I, both of whom have degrees, have tried, unsuccessfully to earn more than $30,000 a year each. With some extreme effort we could probably save $24,000 a year between us. So that's 10 years of modest living and hard work, just to own a bottom-of-the-barrel appartment (not counting in the possiblity of hard times befalling you). It's not exactly an attractive prospect is it. I mean, there's not a huge amount to be positive about when faced with the likelihood that a large chunk of your life will be sacrificed for the pursuit of a few rooms in a scummy apartment block. I don't know if I could ever really consider owning a section in an appartment block real "ownership" anyway.

Yes, I know that this is the reality of "living within your means". We can't all own houses. But in this one instance, where home-ownership is concerned, I think I'd be willing to momentarily retire my anti-debt sentiments for the sake of a more attractive future, where I am (or can at least pretend to be) the king of my own castle.

I am off work at the mo (2 x MVAs) but I work accounting and finance, the banks send a firm in (Price Waterhouse eg) when businesses are in trouble and it is very sad, cos the only thing that matters is making a profit/getting the bank's money repaid. So, if this means cutting back on staff or changing through AWAs the amount of money due to employees, it is done. And the funnier thing is the employees are desperate due to their own finacial obligations to take whatever is offered up. Either that or they face insolvency/bankruptcy.

It is rather harsh, but the banks don't care about your family or your mortgage, they only care about what is due to them.

And yet, the funny thing is while they are applying interest and pressure they still need to show growth. Default interest still shows growth, but it is not actual growth.

It is a catch 22 and the only people who really lose out is the little people. The same institution will grant you another loan with a cheaper interest rate. Lets say you have a credit card, the same financial institution will offer to consolidate (still applying interest) just to make sure the money is repaid. It doesn't matter how long it takes to get it, just so long as they get it.

Debt administrators are called in to consider whether or not you or your business is viable or it has assets or turnover to repay what you owe. If you or your business doesn't cut it. It is close shop, sell up and pay whatever is owed.(creditors get paid first - employee entitlements are second to the creditors) You, if individual debtor, face losing whatever you have. Now creditors, many times will be owed lets say 100,000.00 dollars, they will negotiate rather than getting nothing = 50,000.00 dollars. So, they lose half but they still get something.

So, my advice to anyone negotiating with a financial company is to know this. They don't want you going bankrupt... ok? Better to suggest repaying something, even 50% less than what is owed. Even if it goes to court, a court will freeze the amount owed until you are in a healthy financial position. If everyone was to go bankrupt and renig on paying the loan, they would fall.

It is hilarious, the moment you state you face insolvency, you watch them do a backflip, it goes from demanding letters to we need to work something out! True.

www.youtube.com...

I wrote my post as a kind of before and after thing. So yes, even when we were living off the store cards and consuming, I'm sure in our minds it was totally justified and made a lot of sense. But now... I just can't wrap my mind around it anymore. I'm honestly not even sure what the heck we were thinking and why we felt we had to blow all that money.

I guess a better way to word that would be, hindsight is such a [female dog].

Hey! There is a thread about asking a time traveler a question. I just thought of a good one. I'd ask the traveler if he could go back in time and show us pictures of what we're going to end up like if we get all those cards and spend like that!

I have no credit score.
Thanks to Dave Ramsey, I am "better than I deserve".
If you think you need a "debt score" to make a large purchase, you are deceived.
The problem with most consumers, is that they want everything right now, and are willing to go into debt slavery to get it. Can't get a house without a "credit score"? BULL. It's called manual underwriting, and numerous mortgage companies do it.
Utilities? never a problem with a deposit. And considering the tens or hundreds of thousands of dollars of debt needed to "purchase" a decent credit score, the deposits are insignificant.
It's really simple---live on less than you make, and if your broke friends laugh at you because you don't have 2 cars and a huge house on credit, you are heading in the right direction.

Remember, the "Joneses" are broke, behind in car and house payments, constantly on the virge of bankruptcy, and have decades of payments ahead of them, just to keep what they have.
So, why would you want to keep up with them?

reply to post by gotrox

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Hey, I'm a Jones and I'm not broke, so I take exception to that!! hahahah

Please teach me of this manual underwriting you speak of. If indeed I can get a house without a massive down payment or a credit check, I'm very very interested. Yea, I'm serious.


Jasn

I had an interesting takaway from the movie Sicko.

In countries where medical care and higher education are paid for through taxes, people have much more financial freedom and you make much different types of life decisions when you aren't under financial pressure. For example sticking with a job you hate because of fear of losing health insurance for you or your children.

So in some ways these are methods of controlling the population.

Credit is another strong method of controlling your actions. The companies that track your credit can control your housing, transportation, even your ability to make a living if you step out of line.

Kinda scary eh...

I crated a thread about this conspiracy 2 weeks before this thread came out. But it didnt catch on. Here it is.

ATS - Thread: The Great Conspiracy Of Time, Money, And The Pursuit Of Happiness…

reply to post by SimiusDei

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If you can't make a 25-50% down on your mortgage, you can't afford it on a 15 year fixed. NEVER agree to more than a 15 year FIXED rate.
Used to be, you could do a 80/20 or cost + 30 year ARM, and expect that the value would go up before the rate adjusted.
No longer.
Live in a ghetto and save until you can afford a decent home that will be a blessing instead of a curse, and that is just what a 30 yr adjustable is----a curse. Just ask anyone who has an ARM that adjusted up the last 2 years, while the market adjusted down in value.

Lets take North Vegas as an example.
For a decade, developments have steadily increased in value, so a speculator was secure in the knowlege he could finance a 250,000$ home and expect to re-sell it at a profit when the construction was complete. The finance charges on such a short term loan were not a problem.
In the last 2 years, the sales on these projects have fallen off to the point that developers are selling @ cost, just to recoup their costs of building. (around $175,000 on a $250,000 home.)
So, what do you think happened to the investors who financed a quarter million, expecting to sell @ $300,000?
You got it.
Around 35% of all single family homes in Vegas are currently behind or in foreclosure.
If you had at least a 25% down, you could walk away with a house, paying 175,000 for a 250,000 home.
Or, like a "normal" person, pay 5% down and finance a home @ 250,000 that is only worth 175,000.
Over time, real estate goes up, but you have to be able to ride the ups and downs of the market. And it is very hard to ride the market if you are in the red. If you read carefully the finance agreement, there is a clause for demanding payoff if the value is less than the financed amount. It's very nice to have a 25% buffer (down payment) for this eventuality.

daveramsey.com for a step by step guide to financial freedom.

It's painfull, but worth it in the long run.

reply to post by SimiusDei

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Are you suggesting that politicans don't share the same responsibilities as people do, mate?

reply to post by SimiusDei

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‘Time and chance happen to all men’ Yes, of course there are cases of those who fall into poverty through no fault of their own, and almost always they are those who start out in poverty, but I believe that the vast majority get there through ignorance and poor money management. Debt is never the solution, and always an escalation of the problem. The solution is always: 1. Living below your means, never buying on credit and putting away an emergency fund of at least 6-8 mths expenses. 2. Paying off whatever debts you may have ignorantly or medically incurred. 3. Begin building your financial future as you can afford it, including only a short term, fixed rate mortgage on credit. So let it be written, so let it be done.