I’ve written about how some folks are drowning in debt. And, the methods one can employ to restructure one’s credit card bills. of course, that process means you will no longer have any credit cards at your disposal. (Unless you obtain what is called a secured credit card– where you provide $ 1000 deposit that “secures” your credit line of up to $ 1000. In essence, you can use a credit card only up to the amount of deposit you have with the bank or agency that issued your card.)
For those Americans who have come upon hard times, the choice to end their problems is almost always bankruptcy. Individuals who earn about the median for their area and can’t repay their debts can file Chapter 7. Assuming there is no lying or subterfuge in the application, one’s debts can be adjudicated and the taxpayer gets a clean slate. (Clean in that they owe no money- but they no longer have access to credit cards [for a few years, at least] and their credit history will reflect the bankruptcy.) Of course, one’s assets (over a certain value) are used to satisfy [that’s a legal term, you can bet the credits are NOT satisfied not receiving all that they owe) the creditors’ demands.
We’ve been hearing about this problem in Flint for a long time. (Actually, most of you really began hearing about this over the past few days or so. The media didn’t consider it ‘sexy’ enough to hype, when they had all those political blowhards to cover.) However, most of what we hear and read about the situation is spin. It’s probably about time for some brutal observations.
Yesterday, we talked about negative amortization. Today, we’ll see how the BankUnited “success” became unsupportable as the Option ARM’s term proceeded.