How do you sleep at night? How bad do you wish you didn't have all that debt? How did you get into that kind of position? Have you learned any lessons you'd like to share?
December 07, 2006
And now for the flipside of yesterday's conversation. HP'ers with crushing debt and mortgages - tell us how it feels
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39 comments:
What? Mortgages aren't debt - they're an "investment"
That's what Suzanne told me!
I don't have any debt now, but I defaulted on around $25,000 of credit card debt in the 90's. It was pretty terrible at first, but after awhile the collectors are just annoying, not frightening anymore. "No, I don't have the money, no, I don't know when I will have the money, bye." Screening calls with an ansering amchine was great for this. I had a business checking account I had opened before my troubles started and I just used that.
And, after seven years, it all dropped off. I had gone to a credit counselor who told me to just declare bankruptcy, but credit card companies at that time had little real recourse, so they didn't sue. I did have to negotiate on a judgement from a company that leased me a credit card terminal, but that was it.
It was a pretty ugly time for all kinds of reasons. I was just able to survive for most of that time so my credit was hardly something I worried about. The new bankruptcy laws would make this harder to do now but unless you're the Mafia, you can't get blood out of a stone.
Casey serin feels great about it. He is makeing a killing off of all you. He is a genius.
yeah- the hummer i bought using the equity from my home will help me escape from the suburbs when peak oil hits and the savages are running thru the streets. its an INVESTMENT in my future. and just think of the cool way i will be able to show off in 20years at the mall when i park it in the classic car shows next to all those tiny autin healy and such. this will be worth a small fortune then especially with all the "retro" flat screen tv's in the headrests and spinners. boy, those spinners will really be retro in 2027. cool huh!
Casey will file bankruptcy protection in a manner of weeks
Twib is right, if you are financially stable and feel your job will be secure during the Great Depression II, or maybe you think there will be no great depression, then borrow all you can afford. The creditors will be the ones getting the shaft when you pay them back in even more worthless dollars. Borrow dollars that will deppreciate, buy gold/silver that will appreciate.
WOw. NOt a lot of people owning up to their debt. Hard to believe you are all debt free. Well, I'm stepping to the plate kids.
I had 5k of cc debt in 2002 that I planned to pay off within six to eight months. Then I got a new girlfriend with no real job and parents that refused to help her out (while they were building a 25K addition to their home...)
Three years later, the debt was up to 30K. At some point I hit critical mass where I could only afford the minimums. Combine that with some other unexpected events (car repairs, ER visit (twice), cash strapped employer delaying checks) and boom! it got up to 40K. Well, that's where it's at now.
I don't have a mortgage though. Mostly, I felt that house prices were out of whack already two years ago, and I couldn't, in good conscience, pay those prices. I guess if had been a flipper... Also I already had the crushing CC debt, so taking on additional mortgage debt seemed unwise.
Feels kind of crappy, but I don't think about it that often. I'll pay it off at some point. The hardest part is watching the interest payments go out each month. Otherwise, i just stay away from the cards and pay cash.
During those missed paycheck periods, my interests rates went up due to late payments. So at this point, I have calculated that based on the old rates (around 3% cause I found a way to bounce all my debt between cards), versus the new "default" rates (29-33%), I would have paid down almost all of my debt. I generally wouldn't consider bankruptcy because I full y admit that I put myself in this position, but considering how much the CC Companies are now making off my interest payments alone, I feel they have recouped their investment.
Debt is your friend when the USD presses are at full speed.
Don't know about crushing debt, however.
anon with the 40k debt,
read your last paragraph again.
now, thats why you are paying 29-33% interest rate due to late payments.
Hi. This is Casey.
You can't look at debt as a negative. It is an extreme positive. I am using leverage on my many sweet deals to borrow my way into riches. First: Fast. If you are new to fasting, start slow like me. I started with a 2 hour fast, and gradually increased it by 30-minute intervals. I now start my fast at about 10PM and can make it until 5:55AM (oh it feels good to be an early riser!)
Next, nutrition. You can't maximize your debt potential to it's fullest positivity unless your body in nutritional balance. I suggest wheatgrass shots or Jamba Juice (no I don't work for them). Ohhhmmmm.
Good. Now that you are clear that debt is a positive lever to attain wealth, you must address always doing the right thing. That should be your mantra. Do the right thing.
Tell your lenders you want to do the right thing. In fact I have a sweet deal that I am bird-dogging right now to help me do the right thing, so I'll make up all of those lates and deficiencies shortly.
Another thing to do while you fast is to come to peace with your maker so you can do the right thing.
Third, remember the power of leverage! Remember back to calculus when you were studying limits? Well here's the nutshell: as the divisor gets smaller and smaller, approaching 0, the number gets larger and larger approaching infinity (1/.001 is bigger than 1/.1 - use your calculator to confirm [I use Kumon]). OK, with more and more leverage, your personal divisor is approaching zero, so you are on your way to maximizing the ultimate power of debt!
If you doubt my method, check out my link to my website. You will see pictures of me being successfull.
http://casey.serin.us/
I would have thought this thread would have attracted more posts.
I have around 1.2M in fixed rate debt. 250k on my home and nearly 1M spread across 3 LLCs that I control. The LLCs each own multi-family appartment complexes that are cash flow positive and managed by a management company. The LLCs shelter me from the 1M in debt as long as I run them properly and legally as I never personally guarantee the loans (nonrecourse)(I suspect that with banks tightening lending requirements that this maybe be more difficult to achieve in the futre but I now have a pretty good history built up with my bank).
There has been a lot of talk on this blog of it being a renters market but I think that is only true of single family homes and condos. Multi-family properties are doing pretty well right now. The range I target are "B class" properties in lower middleclass neighborhoods and in the last 12 months the market has switched to a landlord market. Nearly zero vacancies without having to offer any "move in specials" and we have increased rents by nearly 10% after 4 years of no rent increases. I have even been able to kickout my tennets who were inconsistent with their rent payments. I know that sounds cruel but I am always accomodating if you come to me in advance if you are going to be late. I am punctual with my obligations and I expect the same of others.
Guy with $40k credit card debt, if your income is below median for your state. Declare bankruptcy, stop kidding yourself and get a clean start. My household income is 4x my state average and if I had $40k credit card debt under the old rules, I would seriously consider BK.
43k in the hole about a year and a half ago.
Now its down to 13k. Going to have that shit paid off in 6 months hopefully. Then I can start saving for a downpayment.
The kicker is that. I was debt free for a year when I got my first job which helped me erase my college CC debt.
And then I started spending money like it was going out of style.
Ah well, live and learn. I might be starting late learning fiscally responsibility (34 now) but at least its a start
Had much CC debt and house was in forclosure. Sold house in days at height of the mania, paid off CCs and car, now rent. Will never do business with those crooks again. You can expect to get burned doing business with crooks. But it is hard to cross them all off of my list -- but it will happen. Waiting for the day when they all go BK. Money in the bank feels alot better.
I bought in 2003 in a non bubble market (I think non bubble anyway) In Charlotte NC from 1998 to 2002 we definetly had depreciation as builders went from semi custom (1 stick of 2X4 at a time) to tract (house sections arrive on trucks and get slapped together whole walls at a time).
That drove prices from ~80 a sqft to 50 a sqft for a new house. Much better quality too.
In 2003 I snagged a 150K, 2723 sqft new beauty and I financed it at 5% on a 15 yr fixed. 3 1/2 years of extra payments later I am at 120K. The same thing centex is still selling for 175 + 10 (options mine has). The problem though, the buiders haven't even paused for breath and are flooding the market. Never have tried to sell mine, but I fear the crash and overall gloom and doom is going to take me with it when I do like to sell. I feel like the guy that sold a tulip bulb in exchange for a 1000 acre estate and my estate might be worthless when the tulip market crashed.
Cool.
Cow_tipping.
again a typical HP 'er says it all...
"will never do business with those crooks again"- ie buy a house the banks are crooks
but read further
"had much credit card debt, went into foreclosure"
SO whos fault is it.. you bought a house you couldnt afford, or couldnt control your spending, or had no reserves for emergency,,, so you racked up credit cards and foreclosed on your house and now BLAME others like the bank who laoned you money for your problems
A typicall HP mentality... those realtor crooks , those bank crooks... look in a mirror all
perhaps I should blame people like you who rack up their credit cards and foreclose for making other more responsible peoples borrowing costs higher by your poor use of finances which cost the lender...
MAn , no personal responsibility arund here, if you keep blaming others for your problems you get nowhere , go make something of yourself and quit whining..
Noramlly Id feel sorry for one who forecloses,, but if they cant take the blame for their actions and blame others thats another story...
MAn what a negative group of people-
Yep- I am like the guy above I ran up about 40K in debt in 1996. Let it charge off and it disappeared 7 years later. I learned to live off cash, no credit cards. Then I had my brother take out additional cards on his account for me. Now my credit is mostly fixed except for 3 small charge off's I had in 02. None were more than 70-125 dollars. So they have passed the four year limit of state statutation. So they can go drop dead. But I am trying to be a good boy now. Is there anything different that creditors can do now from before?
and pretty soon youll be blaming the landlord "crook" too when you dont make rent... youll then run out of people to blame and have to go live with your parents i guess
How bout instead saying "I" screwed up and that led to cc debt and foreclosure,, maybe then you can learn from your mistakes,, instead of hanging out here and rooting for your neighbors house to crash...
Hey anon- It's only human to screw up and hope your neighbor will fall on his ass too.
and poster number two,, well you let your debt chargeoff and get passed onto higher cc fees for the rest of us..and then let later small chargoffs drop dead,, another person with no sense of personal responsibility, guess this is what HP is all about...couldnt pay back 75-100 dollars , now thats good character LOL, im not coming to your poker game night
At least youre trying to be "a good boy" now....
in the meantime you can root for the housing market or economy to crash with the rest here, and others will help you blame the "crook" credit card companies that YOU applied with and they trused another deadbeat..
To Hey Anon,
Im generally VERY compassionate to otheres in bad situations...
but that all changes when instead of a mature attitude of hey I screwed up, maybe I can get my life together and do better and be more responsible,,it theyre all crooks (that loaned me money after I applied)
I have no sympathy for those who have that attitude of Ill go screw others , its there fault for trusting me..
Its just bad Karma and a loser attitude, yeah thats harsh but its true
I know someone who had a business and went bankrupt many decades ago, tried there best but went under
well that person promised every business debtor hed pay them back when he could (legally responsible or not).. guess what, this motivated him to greater heights, became a VERY succesfull business man later on and tracked down every one of jis debtors (many of whom hes lifelong friends with now after that show of charachter) he now lives next to a famous athlete and is generous and loving life
NOw theres an old school inspirational story, good character and karma, good results..
contrast it with "their all crooks" types here, theres a big difference, and theyll never succeed or be truly happy with that attitude...they should learn
Hey anon- I'm proud to be a deadbeat. It feels so good screwing credit card companies, after all they screw everybody else. Bottom line as long as I enjoy my life, get as much ass as I like and drink my capuccino, I don't care. I am the guy people need to watch out for. When you go out of town on business trips, I am over their house with their wifes. The funny part is that I do their landscaping in their yard and on their wife. Well that's they way I live my life, on my company I accept cash only.
I ssume youre joking... no one MAKES you apply for a credit card and you know the terms going in...
and remind me not to hire you for my lanscaping too
and if losers like you get so much a--, then theres definitely hope for the rest of the guys out there,
proud to be a deadbeat, and proud to help break up a marriage if I can ,, now theres a guy with some good karma and character..seems to fit here,,
Kevin, what do you think???
I cant get a credit card due to my shady spending habits in the 90s. I tok out CC and never paid back to the tune of about 5k. I was in a bad car accident and could not work for a while. Anyway, I went back to college, got my degree in IT and now make over 100k. I pay everything cash. If I dont have the money, I dont buy. My credit is hot but who cares. The only obstacle I saw was buying a home. But for that I married a woamn I am in love with that has a 820 credit score. Bught a home with her credit and my stated income. The only debt we carry is the home we bought pre-bubble 220 and my student loans. Being a deadbeat in the 90s was the best thing that ever happened to me. It made me humble.
totally different attitude from the other deadbeats, no comparison, no problem...
I am not blaming other. I am still trying to absorb the lessons, but to say "it is all your fault" is nothing new. I paid my debts in full -- call me irresponsible and stupid?
I have a lesson to share: buyer beware. I suppose it is an old lesson -- don't go into debt, it is worse than being a slave.
I know a man who dropped out of high school then did a 6 year enlistment in the Navy and joined a MASTERCARD/ VISA CLUB. The Navy made him get a GED, but thats as far as his education progressed.
Upon leaving the military at the end of his enlistment in 1991; he had over $120K of avaliable credit on his cards.
Pulling cash advances... he bought 8 acres in the midwest putting the deed in the name of a trust that he paid an Attorney to form for him.
Using the credit cards he paid $5K to have a well put in. He then bought all the materials and built a house from scratch. Pulled cash advances to pay day laborers to do most of the work. Bought all the materials from lumber yards on his credit cards.
He rented a one bedroom studio apartment while all this was beening done; and all his creditors had this apt address and phone number.
After his house was completed, he pulled some $42K remaining cash advances and dropped out of the site of his creditors...
Today, his credit is clear
past the statute of limitations.
when does walking away from debt cross the line into thievery?
not much different in my book.
I am the proud to b a deadbeat- See I had no choice it was screwed up. Things just got worse and worse- Now I am trying to be good. No more credit cards for me, I can't control myself. Also I like to bang other guys wifes, it is like a high for me. They pay all the bills I just show up and get the puddy for free. The only people I would screw now are hospitals if I get sick have no money or insurance and they charge so much I have no choice. I'm not all bad.
I have around 1.2M in fixed rate debt. 250k on my home and nearly 1M spread across 3 LLCs that I control...
Our LLC's were in a similar situation until the last year. We sold all of our multifamily "dogs" when people were buying apartment buildings like crazy to convert to condos. We used the money to pay off the better properties. Now, all of our apartment buildings are paid off. Let me tell you, having these properties free and clear, we are making much more money than having four times as much property leveraged. This Donald Trump BS about using other people's money is just not true (at least in Florida) due to all of the associated costs required when you borrow money. Trust me when I say that you will make more money with a paid off 8-plex than with a leveraged 30-plex.
Probably a mistake to compare an abberation. (16% interest) I would choose something close to normal.
Oh woe as me. I got a POS 1900 sq ft home built in 2000 in SoCal. Stainless steel and marble abound. I owe a whopping 200k and using an outlandish 5.275% interest rate on a 30 year fixed. My mortgage is a ridiculous 1400 a month. Oh the humanities!!!!!!
40k in debt, ring it up to the max, buy what you need and say screw em for 7 years. I don't feel sorry for them. And you guys don't give me that, ahh everyone else pays for it. If you don't carry a balance you don't pay a penny.
"joey said...
.......I guess my point is that the debt system could so entrenched it may not be realistic to "punish" so many."
Just like during the Great Depression when the banks had so many foreclosable properties on their books they had to look the other way, or go under themselves.
Nailing a few debtors with a lot of publicity won't work, can't get blood out of a turnip! I think we will see major, MAJOR, bailouts, esp. with the Dems in charge. Nobody learns, everybody looses!
it ,ay all be a crapshoot coin toss with the value of the copper penny in copper, worth more than a penny:
anonymous 12/7 6:01 said:
"I have around 1.2M in fixed rate debt. 250k on my home and nearly 1M spread across 3 LLCs that I control. The LLCs each own multi-family appartment complexes that are cash flow positive and managed by a management company. The LLCs shelter me from the 1M in debt as long as I run them properly and legally as I never personally guarantee the loans (nonrecourse)(I suspect that with banks tightening lending requirements that this maybe be more difficult to achieve in the futre but I now have a pretty good history built up with my bank)."
Interesting. Are there any resources you can point us to re: setting up this sort of arrangement?
Thanks!
I spoke to a guy yesterday while shopping, he told me he just got a divorce and had to refi his trailer @ 10% interest. sad.
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