[Rant] I dont get it.... re: multiple bankruptcy

[Oneslowz28]

My uncle has always lived well out side of his means. Don't get me wrong, he is a good father and works hard for a living but he has a problem managing his finances.

He shows up at my grandmothers this morning with a brand new $40k truck. This would not be alarming to most as people do buy new vehicles every day. However, it is odd because my uncle filed bankruptcy last April. I will also concede that in this economy and the state it was in last year filing bankruptcy was not uncommon and he did what he had to do to keep his home. But that was the 4th or 5th time he has filed bankruptcy. Just last week he was telling my mom how he is already up to his neck for almost $20k in credit card bills and now he buys a truck that I know is costing him 7-800 a month in payments.

It just does not make sense. I have had 1 late payment in my life and it was on a target CC back when I was 18. I have an almost perfect credit score and there is 0 negative accounts on all 3 of my credit reports. I have 3 personal credit cards and 2 business cards. All in good standing with small balances to keep them active. I have a mortgage, vehicle payment, and cell phone. All of which report to the credit agency's.

Last month I applied to refinance my home and was denied. So I tried to refinance my truck and was denied due to negative equity in it. I just don't get how a guy who has filled for BR 5 times and has always had multiple late payments and defaulted loans can get a loan for a brand new $40k truck and I can not refinance the $10k I owe on mine.

So HOORAYYY for doing things the right way and being penalized for it while those who abuse the system get everything.


[/rant]

[Zephik]

I gave up trying to make sense of things quite awhile ago. I've learned that life rarely makes sense and that I should just concentrate on myself and how I do things. Otherwise I'll go nutty with all the non-sensical affairs of other peoples lives.

Life is determined to make you go bonkers as far as I'm concerned.

As for your relative there... Well, Welcome to America. Where people spend money they don't have during the worse possible times, every day. I suppose in the right pair of eyes it can be a good thing. It'll teach you what not to do, especially when you see the end result. Although, sometimes people get away with it. Why and how? Who knows. I'm sure that it's just life trying to commit you again. Crazy world we live in.

I wonder if other countries have such a prevailent amount of people that do these sort of things?

[crenn]

Because the people who handle all the money (mainly banks) are greedy and know that people who make their payments on time aren't very profitable.

[d_stilgar]

Because the people who handle all the money (mainly banks) are greedy and know that people who make their payments on time aren't very profitable.

I tend to agree with this, but having the bank seize the home and try to sell it almost always results in their loss. Same goes for people who declare bankruptcy, usually the lender in some way gets screwed.

The way I figure it, if I could give someone a low interest rate and then know that they will make the payments, I would rather do that than take a big risk on the guy who is going to default.

That said, if interest rates on loans become too low, then they can't offer a very high rate for the people with savings accounts. And if they get too low then there are more sure ways of increasing your money than loaning it out and collecting interest.

People sometimes call me harsh, but go in and negotiate. Keep asking for the next guy up the chain of command until you get what you want or a straight answer of 'no' from the guy with authority to give you what you want. Threaten to refinance through somebody else if they don't give you what you want. If they don't give it to you then absolutely take your business somewhere else. You'll find that you have a lot more power than you think if you just act like you deserve it.

[knowledgegranted]

Because the people who handle all the money (mainly banks) are greedy and know that people who make their payments on time aren't very profitable.

I also agree with this.


But from another side. I am not trying to say anything at all, I'm not saying he's a bad guy, and I'm not trying to accuse him of anything. But with a record like that, he's even lucky if they would let him breath air from the bank. Cases like this are in question all the time, does he do anything for side money (get's paid in cash?). Maybe he's not letting that money get on the record, and could have paid cash for the truck.

[msmrx57]

The main reason banks lend people with recent bankruptcies money is the law prevents them from filing again for a minimum of seven years. So the bank know they don't have that escape route available. Unfortunately I've seen it entirely too often. I used to work at a dealership and quite often the people buying the most expensive cars can least affod them.

[Oneslowz28]

Hes a good worker and and earns a decent salary at a tire plant. Just has an eye for things he can not afford. I cant condemn him for having debut because god knows I have lots of it but I am responsible with mine.

[Liquid_Scope_99]

Hes a good worker and and earns a decent salary at a tire plant. Just has an eye for things he can not afford. I cant condemn him for having debut because god knows I have lots of it but I am responsible with mine.

Hey man i hear ya i wonder the same thing about people i am related too also .
Here is one guys teachings that is helping me a lot http://www.daveramsey.com/

And this book of his i highly recommend it man it has helped me so much your uncle would get a lot out of it too if he gave it a chance .

http://www.daveramsey.com/store/prod326.html
Im working the snowball lol

[simon275]

You have 3 personal credit cards?

[Oneslowz28]

I have 3 credit cards not tied to my business. A Visa, Amex and Capital 1. My business cards are Amex and Capital 1.

[x88x]

Stuff like this is why I don't have a personal credit card at all. My philosophy is that if I can't afford to pay cash for it then I can live without it. It's worked well so far, at least. My two exceptions to that rule are student loans (though I won't be taking out any more), and a house (when I eventually buy one). The only credit card I have is my business card, and I only use that for stuff that I know I'm going to get reimbursed for before the payment is due.

[Oneslowz28]

I use my business cards on all computer electronics purchases and office stuff as well as reimbursesables like prints from mpix or whitehouse color. Basically they get used for any and all things I can write off.

My personal cards are used on clothes and toys and the occasional home product.

[Airbozo]

Stuff like this is why I don't have a personal credit card at all. My philosophy is that if I can't afford to pay cash for it then I can live without it. It's worked well so far, at least. My two exceptions to that rule are student loans (though I won't be taking out any more), and a house (when I eventually buy one). The only credit card I have is my business card, and I only use that for stuff that I know I'm going to get reimbursed for before the payment is due.

Many many years ago the SO and I paid off our 2 cards, canceled the accounts and cut up our cards. With one exception I have not needed a credit card at all in over 15 years.

Not having credit cards DOES negatively impact your credit score.

[x88x]

Not having credit cards DOES negatively impact your credit score.

Student loans help with that. I won't have to take out any more, but I have one that's ~$20k left, which I'll be paying off for a while. I haven't actually gotten my score from anyone, but from judging from the reaction of who did look it up (place that owns the apartment I'm renting, etc), it's damn good. I've never had to pay more than the absolute minimum security deposit on anything. I've never had a credit card, but I have had student loans (3 smaller ones paid off now), and I have a cell phone and various other utilities (not sure if those count or not, but they can't hurt), and I've only been late on a payment for anything once.

[knowledgegranted]

Stuff like this is why I don't have a personal credit card at all. My philosophy is that if I can't afford to pay cash for it then I can live without it. It's worked well so far, at least. My two exceptions to that rule are student loans (though I won't be taking out any more), and a house (when I eventually buy one). The only credit card I have is my business card, and I only use that for stuff that I know I'm going to get reimbursed for before the payment is due.

My bank let me have a debt card at the age of 14, with a co-sign of a parent obviously. It's a credit card, but I have this handle of $200. So if I ever over buy something by accident, the handle pays for it and it never gets counted as an overdraft.

The nice thing about purchasing things with it, is that what ever you just bought now has a record, and you don't need a reciept, and that what ever you just bought now has issurance because you bought it on a card (most likely. It's actually true, if you buy things with a card, some places insure it up to a certain point).

It's nice to have one

[Airbozo]

My bank let me have a debt card at the age of 14, with a co-sign of a parent obviously. It's a credit card, but I have this handle of $200. So if I ever over buy something by accident, the handle pays for it and it never gets counted as an overdraft.

The nice thing about purchasing things with it, is that what ever you just bought now has a record, and you don't need a reciept, and that what ever you just bought now has issurance because you bought it on a card (most likely. It's actually true, if you buy things with a card, some places insure it up to a certain point).

It's nice to have one


RE: Receipts...

I always get a receipt. It helps me to verify that what is being charged to my debit card is actually a purchase that I made. Keeps the Finance Minister happy too.

Careful about relying on the insurance. Most debit cards are not covered the same way a credit card is. I found that out the hard way. It is also harder to dispute a charge since the money comes right out of your account.

[knowledgegranted]

RE: Receipts...

I always get a receipt. It helps me to verify that what is being charged to my debit card is actually a purchase that I made. Keeps the Finance Minister happy too.

Careful about relying on the insurance. Most debit cards are not covered the same way a credit card is. I found that out the hard way. It is also harder to dispute a charge since the money comes right out of your account.

Sometimes I phrase things wrong, I think my english teacher would agree.

I always gets a receipt too, you absoutely must, but afterwards, you also have a second proof of purchase because it records to the bank statements.

Thanks for the heads up on the insurance.

[knowledgegranted]

Wow, alot of ironic things are happening today. My finacial magazines came today, and Kiplingers had a facinating article about Credit Vs. Debit Cards. In a wrap up here's what it said.

Pro's to both cards:

Debit:
-Similar protection of credit cards if you sign for your purchases
-No bill to pay
-No interest payments or annual fees
-Enforced limits on spending

Credit:
-Grace Period lets you charge now and pay later without interest
-More rewards programs
-More protection incase of fraud or disputes with merchants
-Better for building a credit history (IF USED PROPERLY!!)

Here are some facts from the magazine article. You can use your credit to your advantage, but 60% of Americans don't, because they don't pay off the entire balance each month. Having a credit card is also a guilty pleasure to over go your spending budget. In result of all this credit card holders get banged by compounding interest. Despit all this, credit cards have massive rewards systems if used correctly. If you pay off your balance every month and there is no annual fees you will find yourself having a big windfall. Also, by using this card properly you can find yourself having low mortgage rates and the ability to have multiple loans.


-Jim