Yet another scary study on how poor Americans are...

[swampwiz]

Did you give back the stuff that you bought with the discharged debt?

Except for the house, all but about $3K was exempt, and I negotiated with the trustee to buy that back for about $1K. My house that I bought for cash on the eve of filing was a few $K over the exemption, and I paid for that overage as well. (I paid for it by taking a distribution from an exempt retirement account.)

As for the stuff that supposedly I had that could be traced to the debt, the debt was built up over such a long time, with cash advances and balance transfers, etc., that a plausible could case could have been made that the debt was consumed with no residual asset. It seemed that when the time would come for a low interest deal to expire, some bank would offer to let me transfer the balance, so I didn't have to pay it off - whoopee! You must understand that at the same time I was building up the debt, I also had sizable assets in the stock market and real estate.

As I was averaging a net return of about 15% on my investments (or about 12% after taxes - I was an active "day trader"), since I was only paying between 0-6% on the debt, I just let it ride without paying it off. Of course, the great recession caused me to take about a $35K capital loss and the banks stopped offering to raise my credit limit or allowing me to keep the low interest rates, so I made the prudent business decision to simply shield as much assets as I could LEGALLY do and filed for bankruptcy.

 

[REWahoo]

And you are spending time on an Early Retirement website to do what? Warn us that we are all doomed? That since you had an unfortunate life/employment experience we're all on track to experience the same fate?

 

[swampwiz]

Looking back on this unfolding fiasco, letting the banksters get away Scott free and even piling on bonuses may be a seminal event. In other times bankruptcy was thought of as shameful and not a cause for celebration. Moral hazzard is everywhere. We need to cut spending but how can you ask any average citizen to sacrifice to help to pay for the too big to fail?

Interesting observation. My grandfather, who slaved away on the galleys of the great intercontinental steamships of that era, lost his $8K account to a bank in the Great Depression. My cousins & I figure that my ability to stick this loss to the banks of today is a moral intergenerational payback.

 

[swampwiz]

And you are spending time on an Early Retirement website to do what? Warn us that we are all doomed? That since you had an unfortunate life/employment experience we're all on track to experience the same fate?

I'm hear to discuss the issues dealing with early retirement. I will admit that I am extraordinarily cynical, and that folks here feel like they can avoid bad fate through their prudent diligence. I have always tended to think that I could forsee darkness ahead of others (although not good enough to avoid stock market swoons all the time - I definitely didn't see this one coming!)

And as a technologist, I understand how labor can be made redundant in the face of technology. I just see now that the onslaught of globalization and artificial intelligence will render the economic value of labor (yes, the same meme that Marx talked about!), even intellectual labor, as virtually worthless, and that the haves and have nots will not be determined by the ability to earn a living through labor, but rather the ability to earn a return on capital investment (which of course requires there to actually be capital!) Those of us rendered as unemployable at this juncture of the Great Recession are just the front line pawns in this great game.

If I were a woman, my nickname would probably be Pandora.

 

[73ss454]

What are you trying to say? The only entities "paying" for the discharge are the shareholders of the banks. I don't know how much you have invested in these particular banks, but as a general equity investor in the S&P 500, my discharge made my return on that investment lower, so I'm paying for it as much as you (presuming you & I have the same overall investment amount in the general stock market.)

Now, if you are trying to say that my default ill make a difference in the actuarial calculation about how risky a person in my FICO score tranche is, my response is that there are so many incalculable factors that go into this, that my action is basically a stochastic blip that should have been expected by the actuarial experts at the bank. I should not be held to blame for their miscalculation.

I'm not trying to say anything, I said it. If you borrow money and you owe it back you should pay it, case closed.

 

[swampwiz]

I'm not trying to say anything, I said it. If you borrow money and you owe it back you should pay it, case closed.

But the bankruptcy laws do not share this feeling. Or do you think that we should go back to the brutish days of debtor's prisons?

Donald Trump went bankrupt what 4 times? Are you saying that he should have not done so? Are you saying that if a company goes bankrupt, that the shareholders should be made to come up with the cash? Why do you feel that the ordinary citizen should be not be able to avail himself of the same protection as the soulless corporation?

Do you think that the banks of today should make good on all the deposits that were frittered away in the Great Depression - including my grandfather, who was the victim of those banks that left him a pauper from all the years of hard work?

 

[HFWR]

But the bankruptcy laws do not share this feeling. Or do you think that we should go back to the brutish days of debtor's prisons?

Donald Trump went bankrupt what 4 times? Are you saying that he should have not done so? Are you saying that if a company goes bankrupt, that the shareholders should be made to come up with the cash? Why do you feel that the ordinary citizen should be not be able to avail himself of the same protection as the soulless corporation?

Do you think that the banks of today should make good on all the deposits that were frittered away in the Great Depression - including my grandfather, who was the victim of those banks that left him a pauper from all the years of hard work?

Shite happens, and bankruptcy is what it is, but it's not something I'd be gloating about, particularly when it sounds as if you scammed your way into too much debt, which is how I'd describe much of what happened to the mortgage brokers, banks, and Wall Street firms when the music stopped on the mortgage merry-go-round...

IMHO, of course...

 

[arebelspy]

But the bankruptcy laws do not share this feeling. Or do you think that we should go back to the brutish days of debtor's prisons?

There's a difference of being in the unfortunate position of being unable to pay your debts (such as a bankruptcy due to medical issues) and choosing to walk away from your debt.

And then being proud of it.

 

[stoutboy]

I can see where swampwhiz is coming from. I've lived my whole life by the book, on the straight and narrow. Lived at or below my means, never went into debt. Saving up for at least a 20% downpayment on our home (will likely pay in full cash)--so no "no-money down" nonsense from me. And so where has that gotten me? I feel like a chump. Wall Street bankers and financiers have pillaged our economy with impunity. It's 'business as usual', even after the crash. Our government is largely powerless to stop it, because lawmakers are complicit. So the little guy is supposed to feel a moral obligation to keep making payments when his house goes under. Or slave away in a vain attempt to crawl out of usurious credit debt? Please. I may start applying for a whole bunch of plastic myself.

 

[ProspectiveBum]

So the little guy is supposed to feel a moral obligation to keep making payments when his house goes under. Or slave away in a vain attempt to crawl out of usurious credit debt? Please. I may start applying for a whole bunch of plastic myself.

Except swampwiz said that his credit debt wasn't usurious. He was paying 6% on the debt, while earning big 12-15% returns on his substantial investments. He just chose to walk away from the obligation when it no longer suited him to continue the arrangement. Perfectly legal, if not particularly moral.

 

[Bestwifeever]

Stoutboy, I looked over your posts and see that you'll retire in your early 50s with 2 pensions, and you expect to have more than a mil net worth in 3 years, plus you have a newborn. Your life sounds good--how have you been played for a chump?

 

[arebelspy]

Stoutboy, I looked over your posts and see that you'll retire in your early 50s with 2 pensions, and you expect to have more than a mil net worth in 3 years, plus you have a newborn. Your life sounds good--how have you been played for a chump?

And who forced you to purchase that house you are now underwater on?

Disclaimer: I am underwater on both my primary residence and an investment property. No one forced me to purchase them.

 

[stoutboy]

Stoutboy, I looked over your posts and see that you'll retire in your early 50s with 2 pensions, and you expect to have more than a mil net worth in 3 years, plus you have a newborn. Your life sounds good--how have you been played for a chump?

Who knows anymore? Did you hear how they're planning on gutting military retirement? I'm not military, but whenever they do something to them, the rest of us feds are never far behind. We're doing ok at the moment, but I feel it's a house of cards. I just hope I'm able to save enough on my own w/o having to depend on the pension and SS. These are very scary, uncertain times for anyone not in the top 1% wealth bracket.

 

[kombat]

Interesting observation. My grandfather, who slaved away on the galleys of the great intercontinental steamships of that era, lost his $8K account to a bank in the Great Depression. My cousins & I figure that my ability to stick this loss to the banks of today is a moral intergenerational payback.

Hey, whatever lets you sleep at night,[Moderator Edit].

 

[rescueme]

Hey, whatever lets you sleep at night, [Moderator Edit].

Don't feed the troll - just add him to your ignore list (as I have already done)...

There is no reason to get upset with someone who (IMHO) is "on the fringe", and does not apply the same high measures of most of us on this board.

Most would take the high road - this toad follows a different path; no need to follow him...

(Yes, I know I'm about to get a "note" from one of the moderators on "personal attacks", but sometimes you have to express your feelings on a subject, as the "person of interest" has done in this case)....

 

[travelover]

Don't feed the troll - just add him to your ignore list (as I have already done)....................

Me, too.

 

[Texas Proud]

But the bankruptcy laws do not share this feeling. Or do you think that we should go back to the brutish days of debtor's prisons?

Donald Trump went bankrupt what 4 times? Are you saying that he should have not done so? Are you saying that if a company goes bankrupt, that the shareholders should be made to come up with the cash? Why do you feel that the ordinary citizen should be not be able to avail himself of the same protection as the soulless corporation?

Do you think that the banks of today should make good on all the deposits that were frittered away in the Great Depression - including my grandfather, who was the victim of those banks that left him a pauper from all the years of hard work?

How much was discharged? If you lost $35K in your investing it does not sound like that big of a deal... especially since you said you bought a house that was 'over the limit' (not sure where you live, but I think that is $1 mill in Florida)...


And to answer your question, it is not the banks that pay for your discharged bank... it is all the other customers of that bank. IOW, they lend to a lot of people at an interest rate that will pay all their expense and make a profit... included in this expense is an estimate for bad debt... if there were not any bad debt the interest rates would be lower for everybody...

Is it legal, sure... did you game the system... sure... do most people think that what you did was 'not right' (you can put stronger language in here for some).... sure...


Edit to add.... just looked up in our state and real estate is unlimited in price... but it can not be more than an acre in town or 100 acres elsewhere (200 for a family)...