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" Financed 14,300 after down payment and got 19%"
60 months @ 6.99 % = $283.09 ea month total cost =$16,985.38
60 months @19.00 %= $370.95 ea month total cost =$22,256.99
$1,054 per year difference for 5 years.
But then, he didn't have to pay 42K that he owed to his CC companies
But, It's the price mazda pays for what he did. At least he wasn't horrified as he expected to pay more interest for his "blemished" credit. Ironically, Equifax says if I file bankruptcy, I will have a mid 600 beacon score... interesting... =oP
I guess thats what bankruptcy is for, and since they are getting rid of chap 7(?) it will make it less feasible in the near future for anyone to file bankrupcy, as they will not be able to avoid their debts, just have protection against their debtors temporarily. They will still have to pay back everything.
He is now facing over $50k in hospital bills because he had to get 2 valves replaced in his heart (birth defect led to an infection).
The hospital says they will finance the bill at 20% interest. He has no credit, no assets, he lives in an apartment, etc.
He makes ok money, so he could make payments for 20 years. He could also wipe out his parents life savings. He could also file Ch. 7 and walk away clean.
How's that for an interesting ethics quiz?
The way it works:
You sign up with the credit counseling agency. You pay the agency a certain monthly payment which it then distributes to your creditors, much like a collection agency.
Sometimes the agency fails to pay your creditors. As a result more late fees and penalties are tacked onto your debt. Your credit report will show "Under Debt Management" which gives your rating a black eye.
The article wasn't completely negative. It states that going to a credit counseling agency is better in the long run than filing for bankruptcy, but all in all it sounds like a very last resort.
Consumer counseling is definetely one step away from bankrupcy. These "stop the collection calls, slash your monthly payment" infomercials make me want to throw something at the TV.
My biggest problem was with Signet Bank (I forget what they're called now). Well, they supposedly agreed to this CCCS stuff, but then I started gettnig late charges if CCCS was late. I made sure to pay them off immediately, as soon as I found out. I also got them back, too. They made this offer where if you'd open a checking account with $500.00, they'd give you $100.00. All you had to do was keep the account for at least 30 days. Then I closed out the account. Wouldn't it be nice if you could make a 20% return in 30 days on the stock market? ;-)
On the plus side, though, CCCS did save me a lot in interest payments! Some of my creditors wiped out the interest charge completely, so the payment was all principal. Others dropped the rate considerably. I think I figured that on average, going with CCCS ended up costing me about 7-8% interest, which is a lot better than 17.9-19.8% or whatever! This was back around the time that 20% APRs were just starting to show their ugly heads, I think. The first time I ever heard of anything over 20% was with Best Buy. I think their rate was 21.6% back then. I'm sure some of 'em are worse now, though!
I remember one time though, I had to call one of the banks for some reason or other. Well, I had two cards with this bank. CCCS had negotiated one of them down to 10% and the other to 12%. The customer service rep noticed this and, on the spot, dropped the second one down to 10%. See, the banks and CC companies can have a heart, sometimes!
Back then, CCCS was a free service, but I think they charge nowadays.
2017 Accord Sport CVT Mod Steel Metallic
I had feeling when Mr. Lerner passed away, that would end it for a long time ...
And here I thought it was the Democrats that formed firing squads by standing in a circle....
Too bad the senate is apparently owned by large creditors...not too surprising I suppose...
But then again, the public believes the myth that BKs cause all of us to pay higher rates
Some people with less willpower may fall into the credit trap. How many credit card offers do you receive in the mail? I throw away at least three a day. Some burden of responsibility should fall onto the lender as well.
If you're charging someone an additional $5,000 on a 5 year loan - above what you'd normally charge - you can still make money even if some loans aren't fully paid back.
The article says that this is true in good times, but can really do damage to a bank if the economy gets too bad too fast; then if the bank has too much exposure they can get burned if a bunch of their subprime customers stop paying within a short period.
The question in the article was whether banks were recognizing the trends in the economy and reacting properly to them. When the economy starts going bad then the loans to subprime should start becoming limited. Of course, no bank manager wants to cut profits too soon, so they're out there taking chances.
From Lokki: The question in the article was whether banks were recognizing the trends in the economy and reacting properly to them. When the economy starts going bad then the loans to subprime should start becoming limited. Of course, no bank manager wants to cut profits too soon, so they're out there taking chances.
One startling thing I've been experiencing lately is the massive sales push to get customers to open a charge account at every retail chain imaginable. The full court press from places like Home Depot, Lowe's, the warehouse clubs, discount stores, you name it, is flat amazing. And if it's not a charge card its "loyalty accounts" I'm being pressed to open. Should I really open another finance account with another retailer just so I can buy a furnace filter or a magazine?
I know the push is coming from two places: Retailers who are desperately trying to hang on to their customer base by giving them "discounts" if they stay loyal; credit card issuers who are cutting sweet deals with retailers in order to boost the number of high interest account holders to make up for lost profits elsewhere (i.e. the stock market).
I agree 110% with Lemko when he states that lenders have to accept some responsibility for the massive over-extension of easy credit offered to Americans. People are going to do whatever they have to do in order to make ends meet. And if that means taking advantage of desperate credit issuers in order to stay afloat, they're gonna do it. It's terribly hypocritical of credit issuers to bombard consumers with an overdose of applications and offers, then turn around and coerce legislators to tighten bankruptcy laws so they are not made to pay the price for actions they played an instrumental role in.
Still, that kinda leans toward the "it's not my fault" way of thinking.
Last week when I went into Home Depot, the first thing I saw was a large table covered with items that a person could pick from simply be filling out a HD credit application.
I could have picked from a nifty flashlight, small tool kit and a couple of other items.
The person manning the table was trying hard to attract the attention of people entering the store.
Then I came home and opened the mail. I probably threw out two or three credit card offers.
I still say it boils down to personal responsibility in spite of the temptations.
Got upset when we his interest rate was at 5.9 percent and I couldn't get him 3.9 percent.
Yet he doesn't have a problem paying his minimum payment on his cards at 17 %
Out of curiosity, what was he trying to buy?
He kept rolling his balances to the next card for those short time low interest offers.
Instead of closing his account on the one,he would use it since the other one was maxed out.
I've seen the same thing. Once a customer had something like 88,000 on revolving accounts.
I have no intention of using the first card anymore though, and I guess that's where a lot of people would get into trouble.
I never tried very hard to push these applications on people, mainly because I just couldn't do it with a clear conscience. I had a card myself, but only because we got 20% off most things in the store when we, as employees, used it. But then the apr was 19.8%, and I'm sure they were counting on most people to just pay the minimum.
We were also in not the best neighborhood in the world. Kind of a "just lookin' outta the window, watchin the asphalt grow. Thinkin' how it all looks hand-me-down (Good Times)". Lots of people with not much money. Older people on fixed incomes, people out of work, etc. Lots of folks just making it from paycheck to paycheck. The last thing they needed was a card with 19.8% interest, even if they did get 10% off their first purchase. I also hated making people go through the hassle of filling out the application, having them wait while I phoned it in, only to be told they weren't approved.
I wonder if these stores would change their ways if customers started complaining to management? I never pushed these cards very hard myself, but I remember some of my co-workers would really get on the customers' nerves, hounding them to sign up. I know it irritates me when I get hounded to sign up.
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Mazda, how's it going? Still on the straight and narrow?
Years ago, the banker did you a favor saying "no" when your budget really didn't support the new monthly payment. Now, they simply feed you credit until you choke. If you max out a card but still make the minimums, up goes your credit limit.
Bankruptcy is based in the Bible and, when properly used, keeps people from a lifetime of suffering and involuntary servitude for debt. These days, with millions losing health coverage, anyone can get way behind the 8 ball through no fault of their own. When I was laid off in 1989, the company notified me that under COBRA, we could keep health ins @ $600/mo. Great when unemployment paid $800/mo. Nice to be the healthiest family on the street, eh?
Yes, some people do abuse bk. No, we don't need to hurt everyone for this reason.
Back to the subject, as our moderator would say. It's not the end of the world to file bk, and you can most certainly finance a car after bk as long as you have a decent income and behave after the bk's discharged.
Best wishes to mazda and all of our friends from a 1989 bk survivor who's Beacon score's now 700+ and is driving an 03 Corolla.
My then-auto financier wouldn't reaffirm my car,leaving me without wheels ( I refused to keep paying for the auto without a reaffirmation), so I financed a used $6800 auto with a thousand down through the dealer's in-house financing. This was at a steep interest rate, like 18%, but the payments were cheap because of the low principal. I chose a dealer that would report to the credit bureau my payments each month. I diligently paid on the loan for a little over two years, including making double payments some months. By that time, my credit score had recovered by over 100 points (from 590 to 705). While the bankruptcy was still on my record, the fact that I was making payments on-time, took on little else in debt, and had recovered much of my score meant it had little impact on my next car purchase. I was able to finance my next car ( a new one this time)through a major lender , at 8%.
If you can PROVE that you've changed, and that the debt-filled life you once led is now over, lenders WILL give you another shot. Just don't expect it immediately.
As for all the moralizers, America is NOT a debtor's prison, and there are many things that can happen in one's life that lead them into the darkness. Just because one is bankrupt financially doesn't mean they are bankrupt morally. Job loss, medical bills, frivolous lawsuits can almost make anyone file for Chapter 7. I'm glad we live in a country that gives people another chance. Always remember that most of us are only a paycheck or two away from the homelsss shelter.