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TAKE STEPS TO PROTECT YOURSELF PART TWO
Posted by: Darrell Castle
September 01, 2010
Topic: Bankruptcy

Today we look at a couple of more steps in our ten step program to better protect ourselves from possible economic problems. Step one was get out of debt and step two was find new sources of income.

Step Three: Reduce Your Expenses: Consider re-ordering your life to live on less even if you don't have to at the present time. If you are a two income family, cut expenses until you could live on one income even if you don't have to. Someday you might have to or perhaps a less stressful life is desirable for you. These steps will allow you to save for the future and pay down debt as in step one. Living below your means now could allow you to avoid becoming destitute in the future, especially if your lifestyle now depends on debt.

Step Four: Learn To Grow Your Own Food: Most of us are completely dependent on the grocery stores and thus the normal computerized delivery system for our food supply. The supply system is computerized for one day delivery from supply depots, ports of entry for imported food, etc. Numerous things could happen to disrupt the supply and if something did happen, in one day there would be no food left on the grocery store shelves. Finding space and time to grow your own food will save money and its actually fun. Be sure to use non-hybrid seeds even though they are hard to find. I usually order mine from an internet source. Hybrid seeds will not reproduce and it's important to have seeds that will reproduce from what you grow.

Well, that's enough for today. Good luck with the first four steps. Feel free to call me to discuss how these things can be applied in your life. The conversation is free.

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TAKE STEPS TO PROTECT YOURSELF
Posted by: Darrell Castle
August 27, 2010
Topic: Bankruptcy

Today we review some of the advice given in an article that recently appeared in the Economic Collapse Blog entitled "10 Practical Steps That You Can Take to Insulate Yourself...". We will get through all ten at some point but today we will look at only a couple.

The article points out that hard times are coming for Americans whether we are ready for them or not and it does make sense to take precautions. The debt, unemployment, and contracting consumer economy are not likely to improve in the near future and they could become much worse so why not look at some simple steps.

1. Get Out of Debt: This one is advice I have given repeatedly on the pages of this blog, and it is a no brainer for difficult times. "The borrower becomes the lender's servant" as stated in the book of Proverbs is literally true. The key to protecting yourself is to become as independent as possible, and as long as you are in debt you are not independent. When things start to get bad, the last thing you want is a horde of creditors chasing you. Don't forget that times will be hard for creditors too. It is possible for you to be free of debt. Take the first step to self protection and call me to discuss how it is possible for you. The conversation is free.

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HOW GOES THE HOUSING RECOVERY
Posted by: Darrell Castle
August 25, 2010
Topic: Bankruptcy

We've mentioned several times in these pages that economic recovery in a consumer driven economy depends on a booming housing market. When residential real estate is increasing in value, people are not so dependent on their jobs because they use the equity as leverage to trade up, buy a car or boat, or just pay down credit cards and start over. On the other hand, when housing is contracting in value, especially with high unemployment people smell blood and start to panic.

Last month sales of previously owned homes fell to their lowest level in 15 years. This news comes despite the lowest mortgage rates in years and bargain basement prices for homes in many areas. July's sales were down over 27 percent nationwide and no area of the country was spared. July was the largest monthly percentage drop for as long as such records have been kept.

The bad housing news worried Wall Street and economists in general as they expressed fears for the broader economy. The New York Times urged people not to panic. It seems that the Times is always interested in advising people who can least afford it to buy on credit. Still, don't panic is pretty good advice. Don't panic, but do take precautions to protect yourself. The last crisis in housing was temporarily abated by an $8000 tax credit which wore off in June. The credit cost taxpayers $30 billion to support the market by subsidizing those who wanted to buy houses.

The government is considering another stimulus to spur the market again. Subsidizing already indebted consumers to go further in debt might not be the best thing for the nation in the long run. People sense danger and are in the process of de-leveraging their debt, but the government continues to incur debt like there's no tomorrow. Perhaps the government is right and there really is no tomorrow and no day of reckoning will ever come. Perhaps the day will never come, but I believe it will. Time will tell who is correct.

In the meantime what can you do to protect yourself? Get out of debt and save money. Call me to discuss how this could be possible for you. The conversation is free.

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DEATH GRIP OF DEBT
Posted by: Darrell Castle
August 23, 2010
Topic: Bankruptcy

Today we consider an article in yesterday's New York Times which attempted to explain why economic recovery is damaged or even prevented by consumer debt. I will give you bits of information from the article and then attempt to translate the bits into regular English.

Here's an excerpt from the article; "It's one of the toughest lessons an investor has to learn: while the value of assets can plummet posthaste, it takes forever to shrink the debt that was used to buy them." Translation; when you borrow money long term to buy an asset such as real estate, and the value of that asset quickly falls; you are prevented from leveraging the asset to borrow because its value is upside down. This spells economic doom for certain.

Excerpt; " Many consumers, though, are still very much in a vise. Halfway through this year, 11.4 percent of outstanding consumer debt is delinquent, up slightly from 11.2 percent a year earlier. An astonishing $1.3 trillion of consumer debt is delinquent, with $986 billion seriously so-90 days late and counting." Translation: People are out of work and unable to pay their bills on time and this is really astonishing to the Times because the administration tells them to report that the economy is recovering.

Excerpt; "Per capita debt balances are staggering as well-and for many consumers, the assets underpinning these obligations have collapsed , reflecting the heavy burden that mortgages represent for most consumers." Translation; People owe a lot of money and now their homes aren't worth what they owe so they can't buy any more stuff on credit.

Excerpt; "Nevertheless, for consumers who are cutting debt and trying to save, it is dispiriting indeed that they generate so little on their money." Translation; Some people recognize their situation and cut back, pay down debt, and save money, but because of the Federal Reserve's low rates to help bail out their banker friends, their savings generates no interest income."

That's enough for today as I leave you with one final translation; the word consumer as the New York Times uses it means ordinary people like you and me.

What then should consumers, those ordinary people, do? Get out of debt right now. Call me to discuss how that might be possible in your life. The conversation is free.

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HOME EQUITY LOANS BECOMING UNCOLLECTIBLE
Posted by: Darrell Castle
August 19, 2010
Topic: Bankruptcy

Are you having trouble repaying your home equity loan? If so you are not alone because homeowners borrowed a trillion dollars from banks using the increasing value of their homes as security. That money has now been spent and the homeowners are unwilling or unable to pay it back.

According to a recent article in the New York Times, the delinquency rate on home equity loans is higher than all other types of consumer loans, including auto loans, boat loans, personal loans and even bank cards.

Why are people less willing to repay home equity loans than other types of loans? People threaten bankruptcy, file bankruptcy, and in ever increasing numbers just walk away and abandon their homes. The Times article lists a paradox of the recession as, "the more money you borrowed, the less likely you will ever have to pay up."

Lenders report that they are lucky to collect 10 cents on the dollar through legal action and that gives the borrower 90 cents for free. This, the lenders believe, is a reward for immorality. The borrower feels cheated because the equity that made him feel wealthy is gone and he still has the payments. The lender feels cheated because he is not being paid for the money the Federal Reserve System empowered him to create on his computer.

Fewer than 5 percent of home equity borrowers said they would continue paying no matter what. Most of the bad debts are still carried on the books of the banks ruining their balance sheets and making lending difficult.

What should you do right now? I don't represent banks, I represent individuals and my advice is get out of debt. Find a no debt port before the next storm hits. Call me to discuss how this could be possible for you. The conversation is free.

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