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THE ROAD TO DEBT SLAVERY
Posted by: Darrell Castle
March 09, 2010
Topic: Bankruptcy

If you are one of the millions of people who live in debt slavery chances are that credit cards helped get you there. Do you remember when there were no credit cards? If you do, you were born before 1950. It was that year that Frank McNamara, while having dinner at a New York restaurant, was embarrassed to find that he had no money to pay for his meal. While waiting for his wife to arrive and rescue him with cash, he dreamed up what became Diners Club, and the world hasn't been the same since.

McNamara's invention was predated by Edward Bellamy's 1888 Sci-Fi novel "Looking Backward" which envisioned a world of the future where cash would be replaced by credit cards that would allow people to purchase "whatever he desires, whenever he desires it." In Bellamy's socialist utopia, you never had to pay anyone back for your purchases. That is unfortunately, not the case today unless you are willing to go through bankruptcy. Credit card issuers are quite insistent on being paid back, though they are happy should you take your time in doing so, provided you pay an interest rate that now averages more than 14.7 percent. Almost half of Americans pay only the minimum due each month on their credit card bills. If you're late even by a day, your interest rate increases to over 20 percent.

Paul C. Wright, in an article for Global Research entitled "Looming Crises: America's Credit Card Bubble Burst" points out that America used to be a nation of savers. Saving money used to be valued as a prudent exercise. The conventional wisdom was to set aside 10 percent of your income as savings for emergencies. Before the credit culture, Americans put large portions of their income in the bank to fund their children's college education, take vacations and for retirement. When they had to pay for something they paid with cash. If credit was required, it was in the form of installment loans, not revolving credit. Now cash is out of fashion and credit is king. In 2005, 164 million American credit card holders charged $2 trillion to their credit cards which amounts to $12,500 for each card holder. By 2008, consumer debt increased by seven times, while the savings rate was seven times lower than in 1980.

Credit card companies used to make their money by charging fees for the use of the cards. They eventually hit on the idea of charging interest on the outstanding debt in a revolving fashion. The combination of annual fees and compounding interest led to the rise of companies like Visa and Mastercard. Credit became a trap in which Americans maintained their standard of living which was being eaten by inflation, through the use of credit. When credit collapsed in the fall of 2008, the house of cards started to fall.

Don't stay in bondage to debt for the rest of your life. Get out now before it's too late.

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TOYOTA IS NUMBER ONE IN CRASH COMPLAINTS
Posted by: Darrell Castle
March 02, 2010
Topic: Personal Injury

The New York Times recently reviewed 12,700 complaint records in the United States over the last decade and found that Toyota had more complaints involving crashes than any other carmaker. Many of the complaints against Toyota were about vehicles not involved in the recalls. For example, the 2002 Camry had about 175 speed control complaints with about half of those involving crashes.

According to The Times article, federal safety regulators said they had received complaints alleging that unintended acceleration in Toyotas caused 34 deaths.

"Of the 12,700 National Highway Traffic Safety Administration consumer complaints analyzed by The Times, the Ford Motor Company had the most, about 3,500." Toyota was second but those complaints were linked to far more crashes, about 1000 compared to Ford's 450.

"A separate examination by The Times of transport ministry records in Japan revealed a similar finding. In reports since 2001, Toyota vehicles have been cited with a greater frequency in complaints of sudden acceleration than those of other major carmakers."

Toyota's chief executive, Akio Toyoda, testified before Congress last week and said that he was "absolutely confident" there was no problem with Toyota's electronics. Transportation officials in the U.S. are reviewing whether to expand their investigation to Toyotas already cleared. If NATSA can find evidence of a defect trend with Toyota they will open a defect investigation.

The single largest source of complaints about speed control involved the 2007 Camry. That model, along with newer Camrys, has been recalled twice in connection with unintended acceleration. A high incidence of crashes linked to speed control occurred in earlier models.

"For the government to order a recall, it must have proof of a potentially dangerous defect, which is difficult to find without cooperation from the automaker."

If you have suffered a serious injury from a crash involving an auto defect, consider getting advice from an experienced professional such as the lawyers at Darrell Castle and Associates.

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THE HUNDREDTH MONKEY
Posted by: Darrell Castle
March 01, 2010
Topic: Bankruptcy

The hundredth monkey effect is a legendary, or mythical depending on your point of view, phenomenon in which a learned behavior spreads instantaneously from one in a group, to the whole group, and then to all other groups. It comes from scientific experiments in the 1970's in which monkeys were studied after some were taught to wash sweet potatoes and the learned knowledge spread through that group and even to other groups with which the original group of monkeys apparently had no contact. The theory then is that there is an unknown number and when that number which represents a certain level of behavior within a given population is reached, the behavior will spread throughout the population. I'm going to speculate in this article as to whether that theory has any application to human behavior.

There have been two recent examples of violent behavior which allow us to question whether or not such behavior, or at least attitude, may be starting to become more generally accepted in our society. The first example is Joseph Stack from Austin, Texas. Mr. Stack, after years of fighting the IRS, which he believed to have gratuitously ruined him, flew his private airplane into a building in Austin which housed about 200 IRS employees. Mr. Stack can be separated from those deranged people who randomly shoot others in post offices, schools, and the like by the fact that he left a note outlining his reasons and intentions. From his note we can conclude that he reached a level of frustration with the IRS that can be termed the "I can't take this anymore" level. In his suicide note he stated "Violence not only is the answer, it is the only answer." His conclusion was that nothing short of violence would get the attention of a government that he felt had turned its back on the American people.

Our second example is Terry Hoskins from Moscow, Ohio. Mr. Hoskins owned a home worth $350,000 against which he had a $160,000 mortgage with River Hills Bank, and he owned a carpet business which had been experiencing losses since the recession. He struggled for months to keep up payments on his home but eventually fell behind and the bank started foreclosure proceedings. Reportedly, he was able to find financing to pay off the loan but the bank knew that it could realize more from the foreclosure sale and so it announced that it would proceed with the foreclosure. Mr. Hoskins set fire to his carpet store and leveled his home with a bulldozer. River Hills Bank now owns a pile of rubble sitting in the snow. The bank has yet to comment on what it intends to do. A local TV station took a poll and 79 percent of those responding agreed with what Mr. Hoskins did.

The capacity to inflict violence and even to conduct warfare has changed in our society. A few years ago warfare was only conducted by large standing armies but now everyone is empowered by technology. Most are capable of learning to fly an airplane and buying or renting one. Most are capable of learning to operate a bulldozer and renting one. As our society unravels and people feel more and more powerless to control their lives, an angry inchoate rage creeps into their lives. The type of behavior exhibited by Mr. Stack and Mr. Hoskins is becoming increasingly more common and more predictable. When individuals conclude they have been pushed too far, many will fight back. Could we be nearing the tipping point of major social upheaval? Who will be the hundredth monkey? Time will tell.

Don't let this happen to you. Take steps now to protect yourself and start by getting out of debt.

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CREDIT CARD DEBT WHOSE FAULT IS IT
Posted by: Darrell Castle
February 25, 2010
Topic: Bankruptcy

We've heard a lot about credit cards lately especially with the new rules for card companies going into effect in the last few days. The new rules assume that there is something at least suspicious about credit card debt and the way that debt is collected. I see credit card debt everyday in my office and I know that it can and often does get out of hand and cause damage to people. Why then has it become so pervasive in our society? Why is it a rare individual who does not have any credit card debt from which he is recovering? We have an article from Todd M. Schoenberger of Tiapan Publishing Group's Tipping Point to enlighten us.

"For those stuck in the quicksand of debt, then you know that it is literally impossible to ever get ahead in your financial life if all you're doing is paying back creditors." Wow, that is a great stand alone statement and very true but Mr. Schoenberger has more. "You've always heard stories about the amount of debt carried by Americans, but the epidemic really came into focus as the housing bubble burst and the U.S. economic system crumbled. Peopled seemed more than willing to remove equity from their homes to pay off credit cards and ignore every cautious sign about the risks they were taking." What cautious signs Mr. Schoenberger? I don't remember the stop sign ever being given, instead it was always go. He continues his analysis. "Once that equity started evaporating, credit card holders saddled with piles of debt, realized they were in trouble and had little chance of recovering. So, realizing this, consumers either filed for bankruptcy or decided to do what seems to be socially acceptable these days in the U.S.: Complain to their local congressional leader and say they are being "ripped off."

Credit card holders realized they were in trouble and had little chance of recovering. Well then, what should they do continue as debt slaves for the rest of their lives? I've counseled thousands of clients about debt and I've yet to have one complain to a congressional representative. How dare they become as impudent as to attempt to cast off their chains? If that were all from Mr. Schoenberger it would be plenty, but there's more. "Now, before I go any further, I have to say that I agree the credit card game is a losing proposition for the consumer. There is no doubt that charging loan-shark like rates to borrowers with little care about how it impacts their lives, is just as damaging to the overall economy as it is to the individual. However, the problems consumers face with credit card companies are completely self made. The banks did not tell the card holders that they needed to take the card, all they did was offer creative marketing with promises of "points, lavish vacations, and a lifestyle that was sure to make your sibling and neighbor super jealous. And the consumer fell for it."

That statement is so untrue, absurd, and ridiculous that it begs a response. He admits that card companies are loan sharks, and they have slick marketing to "market" their cards, and he further admits that their unbridled greed damaged both the individual card holders and the overall economy. He then goes on to lay the whole sordid mess at the foot of the "consumers" because they "fell for it." If an ordinary con man did to individuals what card companies do, it would probably constitute a crime. What then is at the root of all this debt?

In August of 1971, in an attempt to pay for the war on poverty welfare programs and the Vietnam War at the same time, President Nixon took the dollar off the gold standard and let it float without any anchor of value. He did that to inflate the currency and pay debts with cheaper money thus robbing bond holders or at least imposing an unseen tax on them. Since August of 1971, the standard of living of American working people has steadily declined relative to inflation. Each year wages do not increase enough to cover inflation and that dictates a lower and lower standard of living. The government has the same problem of course, and it solves that problem with debt. The government is our example and we follow it quite well. Credit allows us to not only keep the same lifestyle but to expand it. That is until the final day of reckoning comes and there is no more credit. No more home equity as collateral and no more refinancing resulted from the housing crash of September 2008. The large robber banks were bailed out using the labor of their victims, and then the victims were told that it was their entire fault.

Don't fall for it anymore. Make a commitment to stop using credit and live within your means no matter what that is. Hard times are here and will get worse so make preparations for stormy weather. Get out of debt right now by the best means you have available, and live a free life.

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CREDIT CARD RULES CHANGE
Posted by: Darrell Castle
February 24, 2010
Topic: Bankruptcy

The following is a brief summary of credit card rules changes as modified by the new law taking effect immediately, and as reported by the Memphis Commercial Appeal: 1. Interest rates can't be raised in the first year unless an introductory rate has come to an end. After that, cardholders must be notified 45 days in advance of any rate change. 2. For existing balances, rates can't be raised unless the account is at least 60 days past due. 3. Agreements will be clarified so cardholders can see how long it will take to pay off a balance if only minimum payments are made. 4. Service fees, such as activation and annual fees will be capped at 25 percent of the credit limit during the first year of use. After that, there is no cap. 5. Statements must be sent out 21 days before the payment due date. 6. Due dates will remain constant. 7. Credit cards may no longer be issued to anyone under age 21, unless the applicant has a co-signer or can show independent means to pay the debt.

Credit card companies had nine months to prepare for the new law and took steps to protect themselves. They raised interest rates, created new fees, cut credit lines, and closed millions of accounts. The new law does protect credit card holders in the ways previously mentioned, but it also impacts people in ways some may consider negative. It has helped make it more difficult for millions of people to get credit and has made credit more expensive. About 40% of banks cut credit lines on existing accounts which eliminated about $1 trillion of existing unused credit according to Tower Group Consultants. Credit lines were most frequently cut in places most severely affected by high unemployment and declining housing values. The law makes credit less profitable so some less than prime credit risks may not be able to get credit at all for a few years. Card marketing on college campuses is strictly limited and students must show independent means to repay. I guess Congress wanted college students indebted only to the U.S. Government for the rest of their lives instead of credit card companies as well.

Hard times are here and times will get worse for many. Make a commitment to live the rest of your life free of debt. Do it right now before it's too late.

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