Bankruptcy.

Author: admin  |  Category: Consumer, Life, Observations, Politics  |  Comments (0)  |  Add Comment

Late last year my wife and I came to the conclusion that we would have to file for bankruptcy.  She was laid off in June of 2008 and my company had halted many benefits including overtime and pay raises, all due to the economy.  I know, a lot of people reading this now are rolling their eyes at me, probably even labeling me as “irresponsible” and “greedy”.  This is not the case.

When we moved to south Florida all we could really afford was a town home, it was the second cheapest property we found here (the cheapest was a “fix-er-upper”).  The home was a good deal, newly refurbished (the previous owner bought it as a fix-er-upper), all new appliances except the AC unit and we needed to purchase a washer and dryer.  Everything else was new and up to code.  Since then we’ve had to buy a new car (ended up with a Kia Rio Cinco), a new air conditioner, plus a couple of thousand dollars defending ourselves from an oppressive HOA.  We never lived a lavish lifestyle (no luxury cars, no big screen TVs, no long vacations).  We tried to do things the right way and unfortunately the economy caught up to us – the tipping point of our finances was when I needed to use a credit card to pay for basic things like food (and not being able to pay off the balances).

We started talking to our attorney in December of 2008 (who has been great throughout the process, even after the filing).  We couldn’t afford it at the time but probably could in a month or two.  He gave us information on online courses we’d need to take before filing.  The courses cost money but the good news is that the University of Nebraska (one of their departments) is doing a study.  You take a survey before and after the course and they’ll pay you $35 (the course was $20 or $25).  There was also the option to take another survey three months down the road for another $20.  Yes, you’ll make money with this.

During the time we gathered what paperwork we needed.  The attorney stated that we were a classic example of people who should do chapter 7 bankruptcy (all assets liquidated but the slate is completely clean.  This is unlike chapter 13 where you keep everything and the court sets up a payment plan to repay all of your debts).  The rules were simple for chapter 7:  You had to make less than a certain amount in the past 6 months.  My wife’s unemployment and my pay were way below this.  We could only keep $1000 worth of “stuff” each (worth in the resell or used market).  Since we never bought high end luxury items – we were also well below this.  We were also allowed to keep $1000 worth of cash each.  Again, the only time we saw that many digits in our bank accounts is when I had to send out a mortgage payment.

One advantage of Florida bankruptcy laws (I don’t know about other states) is that you can “reaffirm” secured debts – mortgage(s), car payments, and so on.  We reaffirmed the car loans and the mortgages on our home.  Since what we owned on them was close to what they were worth we could keep them as long as we kept our payments current.

We officially filed in January of 2009 – once the paperwork was signed and submitted all creditors were not allowed to contact us and we were to forward all correspondence to our attorney.  He said it could take up to a week for them to get the word so give it a week for the phone calls to stop and 2-3 weeks for the letters to stop.  All debts incurred before this were put on hold (except reaffirmed debts) and any money we made afterwards were inaccessible to creditors (technically if we won the lottery the next day they couldn’t touch it).

Our appointment with the creditors was in March.  This was a lot less intimidating / stressful than I thought it was.  We sat in a room with other people filing and there was a table.  We sat at the table with the attorney and the “creditor” (someone assigned for your creditors).  They ask some basic questions, ask for ID (drivers license).  The whole process was over in less than 15 minutes (I was expecting at least an hour).

The final part of the process was when we got a letter in the mail sometime in late May, 2009.  All of our debts were discharged (in long-worded legal mumbo-jumbo, we had to call our attorney to find out exactly what it meant).  Our slate was clean and we didn’t have to look back anymore.  I honestly wish we didn’t have to, but it was great to be able to breathe a sigh of relief from all of this.

This is something I’d never want to go though again but I am glad it is over with and I’m glad ours went smoothly.  Yes, I am sure our credit score took a large hit on this but we haven’t needed to apply for any loans or credit cards recently.  We’ve been able to meet our expenses with our bank check cards and even, on occasion, go out to see a movie.

I do have some pointers for people contemplating filing for bankruptcy.

1)    Consider all your options.  Is it worth filing or not?  There is the expense and the hit on the credit score to consider, and the possibility of losing things like your house, car, and any expensive luxury items you may have.

2)    Hire an attorney and ASK QUESTIONS.  There are little things here and there that will confuse any average person.  If you hired an attorney, this is exactly why you hired him – ask away.  Be 100% sure you understand everything before you sign anything.  They’ll even go through your credit reports with a fine tooth comb with you – if anything looks odd, ASK!

3)    Educate yourself.  Going back to #2 – ask the attorney any questions you have.  Look on the internet for information regarding bankruptcy.  Learn how money and credit work.

4)    Build up a small stash of cash.  No, I’m not saying hoard tens of thousands of dollars but you should have a small stash incase something happens – car repairs, new appliance needed etc.  You should have one built up anyway but if you do not – start now.

5)    Throw out those pre-approved credit card applications.  You can’t file for another 10 years and they know this.  You don’t want to get stuck in the same situation you were before and the banks know people will be tempted with pre-approved applications.  Just throw them out.

6)    Keep up to date with bills that are not on your credit – especially when your home is involved.  Reaffirmed mortgages, association fees, taxes – all of these are NOT covered by bankruptcy but they can take your home if you do not pay them.  Even though utilities cannot take your home, living without them can be a pain.

7)    Start a financial plan.  Budget all of your expenses and build up a plan to start saving – put as much as you can afford to into your savings, even up your 401K contributions or if you have direct deposit, have some of it go straight into a savings account.  Bank of America offers “keep the change” – if I charge $7.25 on my check card, they’ll take $8 out and put the other $0.75 into my savings account.  I know it doesn’t sound like much but it is turning out to be about $20 a month for the little I use my card.

8)    Recover and move on.  Once the filing is done, the meeting is done, and the process is over with, reevaluate your situation and plan for the future.  If you do decide to get a credit card to help build your credit back up, get one with as low of a balance as possible.  Charge some things on there but pay the balance off in 2-3 months.  Don’t get over your head (again).  Be very wise about your money.

The Great Fake Recession

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Yes, I am officially calling this “the Great Fake Recession”.  It seems that this recession (or depression if you want to call it that) is a fake one.  No, its not in our minds, we see the layoffs every day, people spending less, and so on but I don’t think this is any normal cycle.  I think this is a deliberate attempt to sabotage our economy just so the elite few can benefit from it.  I also think I know who we can blame for it 0 the people who are benefiting from it the most today – banking executives (and other high end investors / executives).

Take a step back though the past few decades.  Though the 80s we saw growth in the US faster than anything before.  Banks were able to invest in businesses and get a good return on their investments.  This lasted all though the 80s and got a small boost in the early 90s with the first gulf war.  Times were great to be an investment banker.

Then came the 90s, physical growth slowed down (well, didn’t grow as fast) but with the exploding popularity of the internet banks were again able to invest small amounts of money into virtual companies (a.k.a. .coms) and get a huge return on their investments.  The banks also invested in “sub prime” mortgages – approving high interest mortgages to people that they knew couldn’t afford them and continue to do this though today, thus making them a lot of money.

The .com bubble burst in 2000 / 2001 and the terror attacks of Sept 11, 2001 showed the vulnerability of the stock markets but real estate skyrocketed.  People wanted to move out of cities and into the “safer” suburbs.  This allowed the banks a golden opportunity – allow many more people mortgages that they know the people couldn’t afford but get huge returns on them.

The banks aren’t stupid and know damn well what was going to happen next and were prepared for it.

Starting after the housing bubble’s height in 2006, things started to catch up to the people.  People started to not afford their mortgages and defaults started to come in.  Not many, but probably more than the banks expected.  Don’t worry, they now own these houses and could sell them, right?  We all know what foreclosures do to property values.  Values are based on recent home sales so if homes in your neighborhood have been selling for $150,000 and then all of a sudden have several selling at foreclosure for less then $25,000 values plummet.

All of a sudden, people had no equity in their homes to borrow off of, many homes even had negative equity (you owe $150,000 on a home worth $100,000).  Banks used this as an excuse to curb lending – not lending out anywhere near as much money as they used to.  This prevented people from getting homes, cars, and other high ticket items that they wanted or needed, including businesses.

Banks started to hoard money.  Its interesting how banks claim they are going to fail because a small percentage of their loans were defaulted but they used this excuse to lend out even less money.  Large businesses were refused loans so they couldn’t buy inventory or give raises.  People spent less money and we all know this vicious cycle.

I know, people can say this is all speculative but here’s the coup de tat:

Banks started to ask for bailouts form the federal government and they got them.  Banks knowingly made bad investment and lost billions of dollars but our government still bailed them out.  So, what did they do with the money?  Hmm..

We see the news every day.  Bank executives getting bonuses worth more than all the money most of us will see in our lifetimes, they go on lavish vacations and give themselves pay raises.  The hoarding continued in many other industries and then these companies complained that they had no money – and got bailed out from the government.  The banks then ask for more money, and then give out more bonuses and vacations.  Just look at AIG – they’re asking for a third round of bailouts after giving out bonuses to executives who no longer work for them.

So- when could it have started?  I’m thinking it started around 2002-2003 when the banks realized that nothing was safe to invest in.  Large corporations probably started the massive hoarding sometime in 2005-2006.  I seriously think this whole thing was planned but I think these corporations really screwed themselves because the economy is now far worse than they expected it to be, and we need to pick up the tab.

So, businesses are playing with our money, losing our money, then asking the government to give them more money because they can’t manage their own finances.  Nice, and I’m still waiting for my bailout.

Dear “my” Federal Government:

Author: admin  |  Category: Observations, Politics  |  Comments (0)  |  Add Comment

I don’t even know who to address to.  President Obama?  My senators and congressmen?  The secretary of the treasury (Timothy Franz Geithner), Uncle Sam?

Since I don’t know, I am putting my request in the best place I can think of – the internet.

We see on the news every day how large corporations are crying poor and how they’re laying off tens of thousands of workers every day.  We see them begging for help from the government and the government is hading out BILLIONS of dollars to these people.  We also see how the executives for most of these companies take these billions and selfishly stash it away in their banks, they sill go ahead with the layoffs, cutbacks, and outsourcing thus making our economy worse.

I am putting in my official request -

I am requesting $5 million US dollars ($5,000,000) to help me and my family with a stimulous package of our own.  First of all, this is less than 1/10 of a percent of the smallest “bailouts’ that our government has given so it sould be looked at as not even a small drop in the bucket.  What’s 5 million when you’re throwing around billions and trillions?

Why should I get it?  We would do our best to pump this money back into the economy, directly. We would:

  • Pay off our debts (home loans, car loans, student loans, etc…)thus making more money available for bank loans, thus directly helping with the credit crunch.
  • We would invest the money so my wife and I can peruse our own careers and starting our own businesses.  Not only would I be able to quit my full time job, I would be opening up a position that someone who is collecting unemployment would be able to get.  It would create one more job in the economy.
  • With our increase revenue, we could continue our schooling and hire people to help us with our ventures, thus improving our educating, our productivity, and creating new jobs.
  • We would be able to afford to “upgrade” our services (faster internet, cable TV, even long distance on our phone) to send more money to these troubled companies allowing them to possibly hold onto more workers.
  • We would be able to upgrade our existing equipment (computers for work, fuel efficient cars since my wife would be traveling a lot visiting clients), maybe even be able to afford some office space for our ventures, thus improving on the commercial real estate market and helping out the retail and manufacturing sector (we would try to make sure anything we purchased was made in the USA).

As you can see, just from this short list, I would do far more to help the economy than what these large corporation are doing with over 1,000 times the amount I am requesting.

So, now the ball is in “my” government’s court.

Will you take me seriously?  if you do, I’m sure you can find out who I am and call me on my cell phone.  Don’t worry if I don’t answer – we have creditors calling us and I don’t answer the phone unless I know who it is.  Please leave a message with legitimate contact information.

Please do not ask me to travel anywhere, unless you pay for the tickets (you can take it out of my $5 million when I get it).  As things are extremely tight with my family, we cannot afford any travel at this time since my wife hasn’t had a job since June of 2008 and my company is laying off people in the thousands.  As you can see, I’ve even fouled this site with AdSense to attempt to hope to pay for some bills (and other living expenses).

If you don’t care about me, ignore this please.  This will be a sign to over 300,000,000 American citizens who are sufering in this economy while theelite few squander every penny they can so they can afford caviar for breakfast before flying in their private jets to some foreign vacation spot.

How much is one TRILLION dollars?

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A little while ago I wrote about how much $700 billion is and concentrated on the interest from that (assuming a 1% savings account). Most of the numbers were scary to think about it. But now, the new number is “one trillion dollars”. As CNN wrote earlier this morning, “A trillion is the new billion”.

Well, now I’m going to base it on how much a trillion actually is. No interest, just the number since many people tend to think that there isn’t much of a difference between a million, a billion, and a trillion.

This is a trillion:
1,000,000,000,000

A one followed by 12 zeroes. That is 1,000 billions or one million millions. Most lower end calculators don’t even go this high (many in total don’t either).

If you spent a million dollars a day and to have spent a trillion dollars by now, you would have needed to start roughly 2800 years ago – about 800 BC. This predates the Roman Empire by about 500 years.

A million dollars an hour you would have needed to start 33 years ago (1976 – probably longer than many people reading this article).

If you spent a dollar a second you would have needed to start roughly 31,709 years ago (about the time that the oldest known cave paintings are known to exist).

Assuming 300 million people live in the USA – each person would get a check for $3,333 (roughly). Assuming 25% are under 18 (according o a 2008 census – 20.1% are under 15 (source)and you only gave it to people over 18 then it would turn out to be about $4,444 per person over 18.

With a trillion dollars you could purchase (April, 2008 values):
The New York Yankees for $1,306M (M= Million)
The New York Mets for $824M
The Boston Red Sox for $816M
The L.A. Dodgers for $694M
The Chicago Cubs for $642M
The Anaheim Angels for $500M
The Atlanta Braves for $497M
The S.F. Giants for $494M
The St Louis Cardinals for $484M
The Philadelphia Phillies for $481M
For those of you who aren’t keeping track – that is the “10 most valuable baseball teams” for a whopping $6.738 billion dollars or less than 0.7% of a trillion dollars. I’m sure with a trillion I could buy all of MLB, NFL, NHL, NBA, and many other acronymed sports industries.

In 2008:
Walmart posted $378 billion in revenue ($12 billion in profit)
Exxon Mobile posted $372 billion in revenue ($40 billion in profit)
Royal Dutch Shell posted $355 billion in revenue ($31 billion in profit)

Those three add up to $1.105 trillion in revenue (and these are the highest revenue companies in the world according to their 2008 figures).

According to the 2008 CIA FactBook – only 15 nations in the world have a GDP (Gross domestic product) of over $1 trillion (The European Union, The USA, Japan, China (PRC), Germany, France, The UK, Italy, Russia, Spain, Brazil, Canada, India, Mexico, and Australia).

You could buy South Korea and still have enough to purchase several major league sports teams. You could purchase Indonesia twice and still have about $10 billion left over. You could purchase Iran ($382B), Venezuela ($331B), and Nigeria ($220B) and have a hold on a large percentage of the world’s oil reserves. You’d still have $67B left over to buy yourself a nice little Caribbean getaway – like Cuba and a second getaway – Madagascar. After that, you’d have just enough to purchase a nice little south Pacific getaway – Fiji.

So, as you can imagine, one trillion dollars is not only a large number, it is an extremely scary number. And for your viewing pleasure, I give you a series (totaling about 45 minutes) called “Money As Debt”.

Part One:

Part two:

Part three:

Part four:

Part five:

The economy sucks

Author: admin  |  Category: Observations, Politics, Thoughts  |  Comments (2)  |  Add Comment

I know, and after watching “The Secret” I’m supposed to keep a positive attitude, which I try to do all the time and are successful many times but I feel I need to get this off of my chest.

The economy sucks. Yes it does. But why?

People are blaming the government – while allowing companies to outsource jobs (and give them tax breaks for doing so) seems to be one of the major factors, it isn’t. The credit crunch now is hurting a lot of people from making large purchases, but most of us still have the credit cards.

The recession is caused by people not spending. Why aren’t they spending? We’re seeing less money or not an increase in money. Why is this happening? Easy – large corporations are hoarding money. I saw a news report this morning about it and I wish I saved the link. Companies are hoarding the money at the top of the chain, including (for the most part) the “stimulus” that the government GAVE to these corporations. They’re being stinger than Montgomery Burns and Ebenezer Scrooge put together. My company didn’t give out ANY pay raises last year and are not giving any out this year (plus no 401K match, and a few other benefits gone). Sure, “temporary” – we all know what that means. I know if I’m lucky I’ll see a raise sometime in 2010 (doubtful, though).

The really sad part is that Wall Street is rewarding this behavior (and why do companies stress so much on the price of their stock?). Large business A says that they are going to lay off thousands of employees – thus contributing to the bad economy and Wall St rewards them by people buying their stock (making the price go up) and making the high-ups who can afford to purchase millions of shares richer.

So, here we are, the worst the economy has been in an extremely long time, at least in my lifetime. What can we do? Unfortunately, not much. What I can suggest is find a niche, something you’re good at, and promote it. Who knows, maybe you can make some extra money with this. But don’t try blogging – I barely make enough though the ads to pay for the registration and hosting fees. J

Hey volunteers – how can you support one candidate when you don’t even know about others?

Author: admin  |  Category: Politics, Stupid  |  Comments (0)  |  Add Comment

Today I was approched by some Obamites (supporters of Obama) telling me that I should vote for Obama and that I need to vote for Obama.  OK, I’ve had enough, time to take off the gloves.

I told them, rather politely, that this is a public election and they have no right to tell me how to vote and by telling me how to vote they are trying to manipulate me out of my constitutional rights.  If they’d like, I can report their actions to their campaign office about this.

Next, I asked them how many candidates for president were there on our county ballot?  This is NOT a trick question.  Weeks ago I got a sample ballot and I recently voted (early).  Both insisted that there were only two candidates on the ballot – Obama and McCain.  Guess what?  WRONG!

There are THIRTEEN candidates on our ballot!

  • John McCain (REP)
  • Barak Obama (DEM)
  • Gloria La Riva (PSL)
  • Chuck Baldwin (CPF)
  • Gene Amondson (PRO)
  • Bob Barr (LBT)
  • Thomas Robert Stevens (OBJ)
  • James Harris (SWP)
  • Cynthia McKinnet (GRE)
  • Alan Keyes (AIP)
  • Ralph Nader (ECO)
  • Brian Moore (SPF)
  • Charles Jay (BTP)

Yes, that is thirteen candidates meaning that they did not know about 11, or roughly 84% of the candidates.  So then I asked them how can they tell me how to vote for one candidate when they didn’t even know about the vast majority of candidates?  Their answer horrified me.

“You shouldn’t vote for them because they’re not serious candidates and they won’t win”.

WHAT????

So, what you’re saying is that no one expected the Dolphins to win the Superbowl this year so they’re not a serious team?  No expected the Marlins to win the World Series so does that make them not a serious team?  It’s bad enough that you were trespassing on my property littering your pamphlets all over the place (both political campaigns are guilty of this) even after I told you that I didn’t want it all over my yard.

I honestly think it is time that the American public needs to pay attention to ALL of the candidates, we’ve had too much bullshit from Republicans and Democrats over the past several decades.  I’m shocked that no one has learned that BOTh sides don’t care about us and we really vote on who puts a prettier bow on their drivel that they spew out every 4 years.

Hey candidates – CLEAN UP YOUR MESS!!

Author: admin  |  Category: Politics  |  Comments (0)  |  Add Comment

I can’t wait for this election to be over.  No more harassing phone calls, no more people knocking on my door all day and no more pamphlets and signs all over the place.  The part I love is who is responsible for cleaning up this mess?  We do.

The candidates and their comittees feel that they can throw pamphlets on our cars (especially just before it rains), throw them in our doors, and stuff our mailboxes forcing us to deal with this extra mess that we have to clean up.

I can just imagine the millions of dollars spent on postage and getting these pamphlets printed.  I doubly love the fact that both claim to be for the enviroment yet not a single piece of propoganda that I’ve gotten was printed on recycled paper.

Hypocrites.

Both candidates are hypocrites!

Author: admin  |  Category: Politics  |  Comments (0)  |  Add Comment

That is right – they both are hypocrites. Why?

Simple – they both claim that they want to improve the environment. If this is true, why am I receiving so much junk mail (physical snail-mail) from both of them? To make matters worse, not a single piece of this junk has any kind of verbiage stating that it was printed on recycled paper.

Come on you two, practice what you preach.

AND WHO IS GOING TO CLEAN UP ALL OF THESE SIGNS?

School House Rock (style) presents Tyrannosaurus Debt

Author: admin  |  Category: Business, Internet, News, Politics  |  Comments (0)  |  Add Comment

I watched this this morning and found it to be interesting while entertaining. I really wish these guys would come back, they were great to watch back in the day.

(10-02-2008 new link since the old one went dead)

How much is 700 billion dollars?

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The number buzz now is seven hundred billion dollars. How much is that exactly?

That is $700,000,000,000.  $7 X 10-to the eleventh power.

If you were to put that in a savings account, assume 1% interest with no componding of the interest, that is $7 billion ($7,000,000,000) a year.

From now on, I’ll only deal with the interest numbers.

That’s $583,333,333 a month (yes, over $580 million) a monthi in interest alone.

It is roughly $19,178,082 a day just in interest.

A little under $800,000 in interest an hour.

$13,318 a minute.

$221 a second.

This $700 billion “buyout” can earn $221 a SECOND in interest.  That’s a var payment to some, a week’s worth of groceries to another.  A credit card payment, a student loan, even some utilities.

In a minute you could buy a lower end car, pay off an entire credit card, or even put a down payment on an inexpensive house.

In an hour you could buy a nice home in most parts of the USA, a modest home in the rest.  You could buy 10 fully loaded luxury cars (or maybe 5 if you go really high end).  You could buy 4 nice boats or one small yacht.  In one hour you could put an entire family though a nice college.  You could start a business and have a good cash reserve on hand.

In a day is more money the average American would see in their entire lifetime.  It would buy a lavish home in some of the nicest areas in the US.  One day’s worth of interest is an average lottery jackpot.

In a month the average person would be thrust into high society whose worth would be near the top 1% of the USA.  You could buy a modest company.  You could live the rest of your life, comfortably and lavishly, just off of the interest.  You could own homes in Hawaii, Italy, France, Florida, and California and hire a staff to take care of each home.  In a month you could give significant help to the average disaster in the world.  In an month you would earn more than many nations own GNP.  You could buy a nation for that much.

On the last estimate, ( http://www.federalreserve.gov/paymentsystems/coin/ ) the amount of currency in circulation is roughly $792 billion.  Yes, our government is about to spend just that much alone to bail out some companies that made bad decisions

Just imagine how this will affect the value of the US dollar.  It is already weaker than wet tissue paper, but this will thrust it to lows we can’t even imagine.  The value of the US dollar will drop, that’s a given.  Since a lot of our needed supplies (oil) are foreign, then it will cost that much more, just in inflation, to get what we used to get.  We saw $4 a gallon gas earlier this year.  I think that is nothing.  I wouldn’t be surprised to see $6-$7 gas if this goes the way it is heading.  All the companies who outsourced their jobs will now be paying a lot more for the same help (maybe this is the silver lining?  They’ll be forced to hire more people in the US since we’ll have the “cheap labor”?).