Trillions in Debt…
By Brett Weiss, Maryland Bankruptcy Attorney on Apr 6, 2007 in Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, General Bankruptcy Information, Maryland
I highly recommend an excellent article by James Scurlock, “Trillions in Debt: Can the Middle Class Hold On?” Mr. Scurlock is the producer and director of “Maxed Out”, an award-winning movie about debt in the United States that should be required viewing for every student (and adult, for that matter) before they apply for credit. (It would do a lot more good than the largely useless pre-bankruptcy credit counseling and credit management “courses” required as a condition of filing for and receiving a discharge in bankruptcy.)
The opening paragraph reads: “Last week, the FDIC and the Federal Reserve Board were forced to remind the nation’s bankers to verify their customers’ incomes — adding that it might be a good idea to determine whether or not said customers could afford their mortgage payments.” The irony is that it is even necessary for the FDIC to suggest that this basic, common sense requirement, should be followed. Of course, no one in the mortgage process really has any interest in actually seeing whether borrowers could afford their mortgage payments, as discussed in my article, “Why is the ‘Subprime’ Mortgage Market Collapsing?”
To further quote Mr. Scurlock, “Some will argue — with no empirical evidence, mind you — that the culture itself is to blame. We have become a bunch of materialistic, Paris Hilton-loving deadbeats! they trill. Such was the argument the banks used to railroad bankruptcy reform through Congress a year and a half ago. If we accepted their argument and blamed the “gamers” — the new welfare queens — they promised us a dividend in the neighborhood of several hundred dollars apiece in the form of lower interest rates. Last quarter, these same bankers announced record credit card profits (JPMorgan Chase, the biggest, more than doubled their profits), but alas, no check arrived in the mail for you or me.”
A great article. Read it, and think.
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