Posted on 12/28/2005 12:43:50 AM PST by SDGOP
An unprecedented spike in filings before reform took effect in fall 2005 is chewing into lenders' bottom lines, and the subsequent lull is showing signs of being short-lived. Bankruptcy attorneys say their caseloads are starting to pick up, and credit counseling agencies -- which provide now-mandatory sessions for consumers who want to file -- say they're seeing significantly more people than they initially predicted.
All this is raising questions about whether lenders will profit as much from the new bill as they hoped.Credit card interest out of control? Find a lower rate.
It wasn't supposed to be this way. The new law contains a “means test” that was supposed to steer higher-income filers toward repayment plans. Lenders expected a rush of consumers trying to beat the bankruptcy deadline, but nothing like the surge that actually occurred. More than 500,000 bankruptcy cases were filed in the two weeks before the law took effect, compared with a normal weekly volume of 30,000 to 35,000. So far this year more than 2 million cases have been filed, 49% more than the same period last year and eclipsing all previous records.
(Excerpt) Read more at moneycentral.msn.com ...
That may stop you from getting the insurance (which I am not minimizing as a problem), but having a pre-existing condition should not keep you from getting the job (and at least that income) in the first place.
"Sure the amount of medical bills on the credit card statement may sum up to $12 k, but what about bills for groceries, gasoline, clothing, and the other staples of life that the strapped person with a medical situation must use his credit cards for to survive?"
Unless you're trying to live "la vida loca" on zero income for more than six months, it's not going to be more than $10K. And that's why you should have emergency funds, plus about 4-6 months of expenses saved up. Also, if you know you're going to be unable to work for an extended period, you should start looking very carefully at your expenses and trim the unnecessary ones. I've fed a family of 4 on $40 a week (in 2005 dollars), and I did it for over six months. Yes, the food was bland and boring. And my kids wore hand-me-down/thrift-store/patched-several-times clothes. Oh, well, life went on. And I still had money in the bank when I went back to work.
Creepy? That's because there are so many creeps out there. Ignorance runs rampant in the USA, as do creeps with no responsibility, discipline, pride and management ability.
That said, too many folks confuse "want" with "need" and deserve the hard times they get.
Speaking as somebody who's drowning in credit card debt and fighting hard to get out of it, with a kid on the way and very little room for discretionary expenses...I 100% agree with you. I screwed up, I'm paying the price for it. It's nobody's fault but mine. I actually thought about bankruptcy, but it'd have to get a whole lot worse before I'd do that. It might take me 10 more years to get out from under this, which won't leave me a lot of time to save for a retirement, but my wife and I will make it happen with God's help and some discipline.
I work in the industry, sort of (contract programming for a major credit card company), and it's interesting to see it from the inside.
}:-)4
Amen. What ever happened to "if you don't have the money then wait and save for it"?
Actually, under HIPAA, the pre-existing condition must be covered IF the person is already covered (hence the "portability" word). This is why it is crucial for people to opt into COBRA coverage if they lose their employment and corresponding coverage. It is expensive, but the potential for financial catastrophe should make one think before going without.
My take on the "half of bankruptcies due to medical costs" angle is that when people incur a medical debt that reaches several thousand dollars, they are more likely to file because there is no tangible product of the expense or intent to incur the debt in the first place. One thinks: "Where did this come from? I didn't ask for this?"
I believe someone who knowingly opts for purchases or expenses leading to financial trouble is more likely to try to dig their way out before filing. As stated in many posts, $12k (while not chicken feed) is manageable debt at even low income levels.
Interesting anecdote. I think there's a lot of truth to what that guy is saying, but let's be realistic here -- America has been "bankrupt" for decades now, and nothing has really changed in the last couple of years.
It's also worth noting that you should speak to a tax accountant if you incur a large medical expense like this. I believe medical expenses above a certain threshold are tax deductible, and if you pay interest charges on the original cost then the interest may be tax deductible, too.
In some industries (airlines, for example), companies file for bankruptcy with such boring regularity that it barely even makes the news anymore.
Often they INTENTIONALLY process the check LATER which was recevied days before.
Stories such as yours are always such an inspiration.
We also once had to figure out how to spend absolutely the minimum. It was amazing. The food may be basic, but in some ways we ate healthier than ever. Junk food is very expensive!
I strongly recommend Dave Ramsey's books and radio programs for financial advice, and one of the best books I've ever read about personal finance is Ric Edelman's The Truth About Money. These two guys have one important thing in common . . . they've both scraped the bottom of the barrel earlier in their lives and use their previous difficulties as a source of immense wisdom in financial planning. If I remember Edelman's case correctly, he and his wife were in such serious distress that they sold almost everything they owned (including furniture) and "started over" sometime in their mid-30s with a run-down apartment, second-hand furniture, etc.
MOre power to you, friend!
Do you really believe that if there no bankrupcies or defaults the usurers would LOWER you interest?
Do you any idea what usury is about?
Lenders want to ignore their responsibility in the lending game... yes you should be a responsible borrower, but a lender should be responsible with their lending... if they aren't, they don't get paid back and they go out of business....
Banks want folks to be held accountable using the force of government, but don't want to face up to the reality that they are lending to folks who the know will default. Do this, and you used to go out of business... now they want government to bail them out.
Do you really believe that businesses don't pass their costs on to customers?
Do you have any idea what competition is about and how business expenses impact the business's ability to attract customers through offering more attractive pricing than the next guy?
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