Belly-up

socal78

socal78

Well-known member
Raise your hand if your circle of family and friends' finances are imploding.

We've all read the headlines that seem common these days about bankruptcy filings soaring. When it starts happening to everyone around you, it really hits close to home. We've had five relatives come to us with their hand out-stretched in the last year and another one just last night, which prompted me to want to post about this- guess I just have to see if this is happening to you all as well. It's never happened to us before but all of a sudden, it's like a snow-storm. We've helped a couple times but for the most part, any help given is just like trying to save a person drowning in a swimming pool - you have to keep yourself anchored securely and not panic & dive right in after them to prevent one unfortunate loss from becoming multiple unnecessary ones. I look around us and see so many signs of disaster now and ahead. A brother is losing his business / only source of income. Another relative, unable to find work, left the state to move in with family. Our in-laws, already on a reduced work schedule and receiving state aid, just filed bankruptcy. They are going to be starting over in their 60s now. They were a constant source of financial assistance for their daughter, who has a severely disabled child, a husband who doesn't have steady employment, and have always been on some kind of gov't assistance. We have so many friends who are cracking open their 401k early, cashing in advanced vacation pay, and other ways of sacrificing tomorrow for the here & now. My elderly grandmother is writing me saying she needs money to buy a clunker-car because chasing buses in the cold Oregon winter is taking its toll on her body. I can think of several more cases of losing jobs, declaring BK, etc. Seeing everyone struggle and ask for help is very draining for us. (Of course, don't get me wrong - once they file BK a lot of times they are in a better financial situation since they are now debt-free, but what is this doing to our country?) Some of them were wreck-less with their money and have made their bed. Others did the best they possibly could with what they had and this is unfortunate for them. All of this makes me want to be extremely cautious right now with our finances. Things like buying a house suddenly seem as necessary as a hole in the head.

And on that cheery note - Merry Christmas!
 
I wonder if it's odd that I don't know of anyone down on their luck that badly.  Maybe I do know people who are barely hanging on, but I'm just not approachable in that way (not that I mind!).  People know they can come to me for help with moving, car repairs, manual labor, etc.  I know a couple families where things are fairly tight, but barring any big unexpected changes in fortune, they'll be OK.  My wife's father was forced into early retirement, but my MIL has a stable job and can get them by.  I have a couple cousins who are still living at home...one who lost his way many years ago, and the other who is living there with her hubby, paying rent while saving for a downpayment.  I won't be surprised if the lost soul comes to me for help sometime in the future, after the rest of his family finally gives up on him.

Merry Christmas, SoCal!
 
First of all let me say that I am sorry to that unfortunate situations of those near and dear to you is causing stress.  But I do want to let you know that I agree that continuing to prepare for the worst is the best thing you can do for your immediate family.  Your analogy of saving a drowning person was perfect.

If you study the history of the Great Depression, you will find that it wasn't one long event.  It was a series of downturns with gaps filled with fleeting recoveries throughout the decade. 

When you look at how we have handled the current economic conditions, the tag line for recovery could be termed as either "Hair of the dog that bit you" or an "Avoid hangovers, stay drunk" policy.  We have done nothing to address the root causes of the economic problems we are facing.  Rather, we are pursuing the same loose money policies that Greenspan used that got us into trouble in the first place.

You can not borrow your way out of a debt induced crisis.


On that note, it's a bit late, but merry Christmas.
 
I'm reviving this topic because I just heard an interesting story today about a neighbor.

It's an older couple with grown children, not living with them. They are self-employed (own and operate a business). They own a home, which they have been in for decades. The wife is experiencing health problems. She can't make it up and down the stairs in this two-story house. Plus, the business was suffering so they decided to sell. They over-priced the home a year ago and it was on the market up until now. They had some low-ball offers. They did auctions twice and never accepted any of the highest bidders. They held open houses every single weekend for a year. I don't know exactly how much their leverage is on this home but I have a feeling it's quite a bit as they used Heloc money to help themselves through hard times with the business in addition to helping their grown children and their families. They also built an extension onto the home, etc. Now that the Heloc is gone, they said they don't know what they are going to do because as of today, the business is totally kaput. They are broke.

They devised a way to keep themselves afloat. The husband and wife have enrolled at a community college! "Why?", you ask? So they can technically become "students" and each can do a cash-grab on student loans... AND they have ordered their grown children to do the same, so all the children have done so, too, and are handing over the money to mom and dad. I'm not familiar with student loans and thought the money could only be used for education expenses but apparently not. This is not an option I had heard of others exploring but it is creative, I'll give them that. It's interesting the things people will do to keep it up / kick the can down the road.

 
creative?  So is coming up with a unique mask and robbing the bank.  I certainly have sympathy with their predicament, but I don't think that encouraging your children to perpetrate fraud is the best way to handle a financial situation.

I remember when I signed up for a class at a community college a long time ago I stood behind a woman during the registration process (long before everything was done on the internet).  She was desperate to find 12 units to fit into her schedule so she could quality for financial aid even though she appeared very well off.  The poor clerk kept on trying to find open yoga, computer and tutoring classes.  It seemed to take forever since she didn't speak english very well and was hard to understand.  I remember the woman protesting because she had to pay some kind of $3 course fee and she didn't feel like had to since she was on financial aid. 

Anyway, the point of me telling this is that I think gaming the system has been going on for years and it seems to be more prevalent in certain communities than others.
 
Student loan debt is probably one of the worst kinds of debt imaginable, since it isn't dischargeable in bankruptcy and lenders can add fees and penalties with impunity, so they are making a bad situation even worse.  Lots of student loan horror stories out there on the internet.
 
aealong said:
Student loan debt is probably one of the worst kinds of debt imaginable, since it isn't dischargeable in bankruptcy
Click to expand...

Technically, it's not but I've known too many people who just paid off as much as they could or all with plastic, then had their debt discharged through BK.
 
aealong said:
Student loan debt is probably one of the worst kinds of debt imaginable, since it isn't dischargeable in bankruptcy and lenders can add fees and penalties with impunity, so they are making a bad situation even worse.  Lots of student loan horror stories out there on the internet.
Click to expand...
I'm glad most of my student loan debt is fixed at an interest rate of 1.75%.  The rest is a loan with a rate of Prime - 0.50% or 2.75% (I'll probably pay that loan off once the rate gets above 4%).
 
I have a family member that's been out of work for a while and know some friends that were out of work for over a year.
 
You must log in or register to reply here.
Back
Top