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

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

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

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

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

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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FOOD STAMPS TO BE CUT AGAIN
Posted by: Darrell Castle
August 16, 2010

Yes, Congress is considering cutting funding from the Food Stamp Program again and once again it is not to save money. The last time we looked at this issue we saw that a record 40.8 million people now use the Food Stamp Program to feed their families. That is 1 in 8 Americans who cannot properly feed themselves without supplemental food assistance from the 53 percent of Americans who still pay income taxes. I assume the other 47 percent either don't have jobs or they are just too poor to earn the minimum necessary for tax obligations.

Congress recently cut 26 billion dollars from the program to help fund the state bailout of teacher unions (oh I'm sorry) I mean state assistance for teacher pay. Now we are told that Congress is considering another 8 billion dollars in cuts to the Food Stamp Program to fund the First Lady's top priority, the "Let's Move" initiative and its sub part, the child nutrition bill.

Is this robbing Peter to pay Paul? Well, if it is, when Peter is robbed to pay Paul somehow Paul is usually happy but Peter is rather unhappy. Since Democrats are the ones cutting food aid to the poorest among us, who will be there to speak for them? I suspect that no one will speak. Oh there will be a few Democrat members of Congress who will attempt to salve their consciences with a few words and curry favor to some voters with a few words while they are at it, but when push comes to shove the Party leadership must be satisfied at all costs.

Congress just doesn't get it right now if it ever has. Record numbers of people are suffering and a new record is set every month. Idiotic legislation to buy votes and appease the leadership must be set aside for a while. In 2 or 3 decades when the country is starting to pull out of depression they can go back to appeasing leadership and lining their own pockets. Perhaps until then we would all be safer and better off if we just paid them to take a long vacation.

What can we do about it? Not very much folks, not much at all, but consider protecting yourself by getting out of debt. Call me to discuss how it can be possible for you to live without debt. The conversation is free.

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WHAT STAYS IN VEGAS IS PROBABLY BANKRUPT AND ON FOOD STAMPS
Posted by: Darrell Castle
August 05, 2010

We are told that the Las Vegas real estate market has stabilized and will come back, but home prices continue to lag more that 50 per cent below their 2006 highs. The only thing necessary to understand Nevada's real estate problems is to look at the state's economy in general.

According to Joel Bowman writing for The Daily Reckoning;" At 14.2 per cent, Nevada's unemployment rate comfortably outpaces the national average of just below 10 percent...What's more, many analysts don't see the situation improving measurably until later in the decade." It's hard to pay down a mortgage without a job.

Nevada continues to borrow heavily from the federal government to cover its growing claims for unemployment compensation. Through July, 35 states and territories have had to borrow from the federal government to pay benefits. So let me get this straight; because the federal government causes rising unemployment with its monetary policy, the states cannot afford all their claims because their tax base has been destroyed by unemployment so they must borrow from the government which caused the problem in the first place, a government which is also technically bankrupt and must borrow from its neighbors to fund its day to day operations. You just can't make this stuff up.

Meanwhile back in Washington, the nation has a record 40.8 million on food stamps, fully one out of every eight Americans. The record has been broken for 18 consecutive months. The Senate just voted to cut food stamp benefits by 6.1 billion to help fund Medicaid and teachers' jobs. The argument, essentially, is that poor people have too much money for food.

A record 1.6 million people are expected to file for bankruptcy relief by the end of this year. How all this is supposed to indicate economic recovery I cannot understand. Private sector debt is decreasing as people cut back and public sector debt is increasing as the federal government continues to follow the wrong approach. This can only lead to disaster when 70 per cent of the economy is consumer spending.

What can you do for your family right now? Get out of debt and you will be at least somewhat out of harm's way. Call me to discuss how this can be possible for you. The conversation is free.

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BANKRUPTCY COULD SAVE YOUR HOME
Posted by: Darrell Castle
July 30, 2010

In my last post I talked about Chapter 7 Bankruptcy and how it can help you legally discharge debts you can't pay. Today I want to talk about Chapter 13 Bankruptcy and how it has the power to help you keep your home.

The Chapter 13 system is easy to understand if you think of it in terms of how much income you have as opposed to how much your monthly payments total for all your debts. For example; suppose you have monthly income of $3500 dollars and you need $3000 to meet your basic living expenses; that leaves you $500 dollars of disposable income each month to use as you see fit. Let's also suppose that you have $1000 dollars of bill payments each month so that you don't really have $500 of disposable income each month, and in fact, you are short by $500 dollars. Chapter 13 allows you to combine the $1000 of bill payments into the $500 that you have and still keep all your property.

If you are behind several months in your mortgage payments, and the bank is about to foreclose, Chapter 13 can stop the foreclosure and allow you to pay back the past due amount over a period of years instead of all at once. Your debts can all be combined into one payment that you can afford, and you are protected from creditors so all collection calls must stop.

Unlike private debt consolidation firms, Chapter 13 has the force of Federal Law behind it, and it is binding on the creditors whether they like it or not. Chapter 13 is a powerful law designed to help you through a difficult time where your income has been temporarily disrupted such as loss of your job or unexpected medical problem. The only requirement is that you have a source of income to make the payments proposed in your plan of repayment.

You need an experienced law firm to help you make the decision as to whether any bankruptcy chapter is right for you, and if it is which one. The lawyers at Darrell L. Castle and Associates have over 50 years of experience in helping clients with such difficult decisions. If you would like to discuss how you might be able to use the bankruptcy laws to live a life without the burden of debts you can't pay, call me. The conversation is free.

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CHAPTER 7 BANKRUPTCY FILINGS SKYROCKET
Posted by: Darrell Castle
July 28, 2010

Bankruptcy filings hit a five year high last year. In 2009 more than 1.4 million people filed for bankruptcy, an increase of 32 percent over 2008. What's the difference between the bankruptcy chapters that are available for people to use?

There are many differences, but today let's talk about Chapter 7 and next time we can cover Chapter 13. Chapter 7 filings skyrocketed last year. Chapter 7 allows you to discharge, which means get rid of, not pay back, debts such as credit card bills and medicals and you can usually keep your property such as your home and car or truck depending on the exemptions available in your state.

What does that mean for the average person? It means that if you have reached the point in your life where you simply cannot pay all that you owe, the law allows you to have a fresh start. The law doesn't require you to remain in perpetual debt that you cannot pay, and be continually subjected to creditor calls demanding payments you cannot make, etc. Chapter 7 allows you to legally discharge your debt and start over.

During difficult economic times like those we are going through now, being free of debt is a welcome relief for many people. Many people are also reevaluating their lives in terms of whether they really need to continue the consumerism that led them into debt in the first place. Chapter 7 is a fresh start for many of those people, and a positive rather than a negative step.

Should you find yourself in a situation where you can no longer make your house payments, but your home is impossible to sell because you owe more than your home's value, Chapter 7 can provide relief through discharge of the mortgage debt. If you have a vehicle you can't pay for and the creditor demands payment after he has repossessed the car, Chapter 7 can provide relief from that debt. Chapter 7 stops lawsuits against you from people trying to collect for debts you cannot pay.

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OUR GREATEST FEAR
Posted by: Darrell Castle
July 26, 2010

What is the greatest fear of Americans age 44-75? Fear of death, fear of serious illness, fear of mental illness or dementia, or perhaps fear of terrorist attack is our greatest fear? No, according to a survey taken by the Allianz Life Insurance Company, running out of money is the number one fear of 61% of thosesurveyed. To the remaining 39% death was scarier than running out of money.

92% of those surveyed believe the United States is facing a crises in its retirement system. The majority believe that the Social Security System is underfunded and will not be able to cover all obligations. 56% believe that they will not be able to cover their basic living expenses when they reach retirement. More than half said their net worth has crashed since the economic crises of 2008 begin and they have had to cut back.

We used to find our security and meet our emotional needs through family and religion but now those institutions have been weakened to the point where we are on our own. We have nothing to count on except money and when that is taken away, we have nothing to count on. Facing the last quarter of life with nothing is the most terrifying thing for the majority of people.

People should be afraid of losing their financial security because there are many financial threats just over the horizon. Times are already hard and they will get harder for most of us. My advice is to prepare by getting out of debt. Financial preparation would be much easier without debt to take away all your money.

Call me to discuss how a life without debt could be possible for you. The conversation is free.

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DEBT COLLECTORS CHANGE WITH THE TIMES
Posted by: Darrell Castle
July 21, 2010

According to CNNMoney, debt collectors are increasingly turning to harsh, abusive tactics to collect debts. Here's an excerpt from the article.

"Harassing phone calls, abusive language and physical violence are becoming a bigger part of business as debt collectors struggle to round up money from people who don't have it."

Physical violence, really, yes that's right, threats to use violence and actual violence are apparently on the increase in debt collection as more and more people lose their jobs and their ability to pay. Well, in a less politically correct time, we used to call those people loan sharks.

Here's some more from the article. "Complaints of harassment by debt collectors surged 50% to 67,550 in 2009, according to the Federal Trade Commission, and they are on track to jump 13% this year, based on the number of FTC complaints filed in the first six months. The number one complaint is repeated calls, and it is not uncommon for collectors to bombard consumers with back-to-back calls for days, weeks, months and even years."

I remind people that they don't have to put up with aggressive collection tactics or any other kind for that matter. People want to pay their debts, they simply can't. When there is some money but not enough, choices have to be made as to which debt is most important.

Wouldn't it be better to keep all your money and live without the stress of not being able to pay your debts? Would your family be better off if you didn't have debts to pay? Perhaps you could contribute to your church, or send your children to college, or even save for a rainy day.

Call me today to discuss how a debt free life could be possible for you. The conversation is free.

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NEW DEBTOR PRISONS EMERGING
Posted by: Darrell Castle
July 19, 2010

Over the course of human history many different laws and customs have allowed creditors to use methods of debt collection that we in a more enlightened time might consider to be harsh, immoral, or even brutal. For example, people who could not pay their debts used to be thrown into jail until they could pay, but the debtor prisons were abolished in the United States in the 1800's.

Now, as America slides further into darkness, jail time for unpaid debts is returning to our judicial system. Minnesota seems to be the leading state, but there are many others in which it is possible to be jailed for unpaid debts. The judicial system calls it contempt of court rather than unpaid debt and I suppose that makes those who run it feel a little better about themselves.

This is a shorthand version of how the process works. A person has a debt he does not pay and the creditor, or someone the creditor has sold the debt to, brings a lawsuit for collection against the debtor. The debtor does not appear at the hearing and the creditor is granted a judgment for his debt. In many states, like Minnesota for example, the creditor must schedule a second hearing for the judge to examine the debtor's assets to determine if seizure of assets, wage garnishment, etc. would be appropriate. The debtor unfortunately does not appear for that hearing either, and the creditor asks the judge to issue a warrant for contempt of court which he does. When the debtor is found, he is arrested and spends time in jail. The reason is contempt but everyone knows it is actually for unpaid debts.

The whole process is really a matter of using the public laws and system of justice by private individuals or agencies to enforce collection of debts. It's all wrong and it's not justice but a pervasion of justice. The debtor undergoes the embarrassment, inconvenience, risk of job loss, and even danger, of jail because he could not pay his bills. This process may seem inhumane to you but this is the new America where inhumane, heartless, and merciless actions become commonly accepted. As we head back in time to medieval approaches to our problems, approaches that existed before the advent of Western Civilization made the individual triumphant, the all powerful corporate government is now completely ascendant.

The best and most obvious course of action for anyone is to get out of debt. Economic times are hard for many and they appear to be getting harder. Call me to discuss how a life free of debt could be possible for you. The conversation is free.

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INSTALLMENT DEBT VERSUS REVOLVING DEBT
Posted by: Darrell Castle
July 08, 2010

There are two different types of debt that most individuals carry; installment debt and revolving debt. Installment debts are usually those secured by collateral such as car loans and home mortgages, while revolving debts are such things as credit card balances.

Revolving debts are unsecured by any collateral the creditor can repossess. Therefore, they are viewed as riskier by credit agencies than installment debts, even though installment debts are usually much higher. FICO is the corporation which devised our present credit rating system and according to their consumer operations manager, paying installment debt has very little impact on your credit score compared to paying revolving debt.

FICO also says that once your revolving debt has gone to a collection agency, paying it doesn't help your credit score very much because the rating agencies think that it is already too late for you. The agencies advise paying off revolving debt first in order to boost your credit score.

As someone who counsels people in financial distress every day, I have a few different thoughts for you. If you pay your credit card bills when you do not have the money to pay your home mortgage payment, you are asking to be homeless. You will lose your home in foreclosure if you do not make the payments. Never let your mortgage payment go unpaid so you can pay credit card minimums.

In addition, the advice to pay credit card balances first may help improve your credit score, but if you are struggling to make ends meet, what difference does it make? The last thing you need in that situation is more credit because that leads to more unpayable debt.

The worst thing you can do when you are financially struggling is borrow more money. This is especially true when you take a second mortgage to pay credit card bills. It does save you money on interest, but it also converts basically uncollectable, unsecured credit card balances into mortgages and thus endangers your home. It also frees credit cards for more debt to be accumulated and for some, the urge is irresistible.

What advice would I give a financially distressed person right now? Be careful and protect your future. The stress you are in is not healthy and it will not relieve itself without action on your part. The last thing you should worry about is more credit so you can get deeper in the hole. Consider getting out of debt and living a life free of debt.

Call me to discuss how this could be possible for you. The conversation is free.

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WORRIED ABOUT THE U.S. ECONOMY
Posted by: Darrell Castle
June 28, 2010

If you are worried or even concerned about the U.S. economy and how its problems will affect your future, you are not alone. Here's just a few statistics that should give anyone a reason to be concerned.

1. If you only make the minimum payment each time and every time it's due, a $6000 credit card can end up costing you over $30,000 depending on your card's interest rate.

2. In February, 2010 there were 5.5 unemployed Americans for every job opening.

3. More than 40 percent of those employed in the U.S. are working in low wage service jobs.

4. Over 1.9 million Americans filed for personal bankruptcy in 2009.

5. U.S. banks repossessed nearly 258,000 homes in the first quarter of 2010, a 36 percent jump from 2009's first quarter.

6. For the first time in history, banks own a greater percentage of residential housing net worth in the U.S. than all individual Americans put together.

7. More that 24 percent of homes with mortgages in the U.S. were under water at the end of 2009.

I could go on with these statistics for a long time but perhaps the most important thing for you to remember is, don't be one of them.

Through use of the bankruptcy laws, it is possible to:

1. Stop the foreclosure of your home.

2. Stop the repossession of your car or truck.

3. Stop wage garnishments and lawsuits for debts.

4. Stop creditor calls to your home and work.

5. Combine all your bills into one payment that you can afford.

6. Get completely out of debt - Don't be a statistic!

Call me to discuss how you can achieve these things for you and your family. The conversation is free.

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FANNIE MAE ECONOMISTS CONSIDER BULLDOZING HOMES
Posted by: Darrell Castle
June 25, 2010

Today's post falls under the category of; you just can't make this stuff up. According to a recent article in The Washington Post, economists for Fannie Mae, the gigantic government owned mortgage lender, believe that there are so many foreclosed homes in its inventory that they may have to be torn down so new ones can be built. Here's an excerpt:

Said Duncan: "Some of that shadow inventory could have to be torn down. It was not economically viable when it was put in place." That includes some boom-time developments in California's Inland Empire and Central Florida. Duncan said people might find that the cost of sustaining their lifestyle in some developments-including high transportation costs to far-away jobs is greater than the cost of the home. That could wipe out demand."

So let me make sure I understand what's happening here. The Federal Government induced mortgage lenders to make loans to millions of people who had little or no chance of ever paying them back by promising to stand good for the loans. When the entire system had a catastrophic failure the government took over the failed lenders, Fannie Mae and Freddie Mac, thus handing taxpayers a bill of several hundred billion for their failed policies.

Now, the government is so addicted to Keynesian economic theory of increasing demand by spending it into existence that it is considering tearing down perfectly good homes so home buyers will have fewer choices. The smell of panic and fear is in the air and when something as gigantically destructive as the Federal Government panics it's time to take action to protect ourselves. Said another way; just when you think it can't get any more stupid, it does.

Folks, what more do you need to be convinced that harder times are coming and they will last a long time? Take steps to protect your family while you still can. One of those self protection steps could be getting out of debt. Call me to discuss how that might be possible in your life. The conversation is free.

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THE ADVANTAGE OF BANKRUPTCY
Posted by: Darrell Castle
June 23, 2010

A brief examination of the things bankruptcy can accomplish for an individual will reveal that filing for bankruptcy has many advantages over private debt reduction companies that we discussed in the previous article posted. Let's now consider some of bankruptcy's advantages.

Bankruptcy can eliminate a person's unsecured debts completely and in a relatively short period of time. Credit cards, medical bills, personal loans, certain older tax bills, and many other bills can be eliminated usually within about four months from the time the case is filed.

In addition, many of the problem bills that we experience as a result of today's economic troubles can be resolved through bankruptcy. Many banks and mortgage companies are now pursuing homeowners for deficiency balances on foreclosed real estate. For example it you owe $200,000 on your home, and the bank takes your home in foreclosure and sells it for $150,000, you could still owe the bank $50,000. That result can also happen if the bank allows a short sale which is a sale for less than the mortgage amount. Bankruptcy can remove those deficiency balances for you.

If you have a car that is repossessed and sold, you could have a balance resulting from the sale that the lien holder will still expect you to pay. Bankruptcy can remove that deficiency balance for you. When you have a second or third mortgage and your house is only worth as much as the first mortgage or even less, the second or third can usually be stripped away through bankruptcy.

Bankruptcy can stop the foreclosure of your home, and allow you to catch up the past due amount over a long period of time, and at a payment you can afford. If your car is threatened with repossession, you can usually keep your car and make payments you can afford.

Bankruptcy also stops the nasty and embarrassing creditor calls that come when you are behind on your bills. It stops legal action against you and usually removes the financial reasons for the legal action. Quite simply, it allows you to have a fresh start and begin the process of putting your life back in order. Bankruptcy can help you reduce stress, start sleeping again, and even save your marriage.

Call me to discuss how bankruptcy could possibly be a benefit in your life. The conversation is free.

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THE DEBT SETTLEMENT INDUSTRY
Posted by: Darrell Castle
June 21, 2010

According to a recent article in the New York Times all is not well within the private debt settlement industry. Here's an excerpt from the Times article:

"They take advantage of vulnerable people," she said. "When you're desperate and you're trying to get out of debt, they take advantage of you..."

"As the industry has grown, so have allegations of unfair practices. Since 2004, at least 21 states have brought at least 128 enforcement actions against debt relief companies, according to the National Association of Attorneys general. Consumer complaints received by states more than doubled between 2007 and 2009, according to comments filed with the Federal Trade Commission."

Many people including consumer groups and state attorneys general have complained that the companies do not deliver on their promises. "In the case of two debt settlement companies sued last year by New York State, the attorney general alleged that no more than 1 percent of customers gained the services promised by marketers. A Colorado investigation came to a similar conclusion."

Even the industry's own figures show that their clients typically fail to obtain relief. "The Industry is designed almost as a Ponzi scheme," said Scott Johnson, chief executive of US Debt Resolve, a debt settlement company based in Dallas, which he portrays as a rare island of integrity in a sea of shady competitors. "Consumers come into these programs and pay thousands of dollars and then nothing happens. What they constantly have to have is more consumers coming into the program to come up with the money for more marketing."

My advice is that you get out of debt and live a debt free life but use a competent professional to do it. Call me to discuss how freedom from debt could be possible in your life. The conversation is free.

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HOUSING RECOVERY NOT SO FAST
Posted by: Darrell Castle
June 18, 2010

The term recovery is often used with regard to the decline in housing values that we have seen in the last couple of years. That is because any economic recovery depends on an increase in housing prices so that people can borrow the increase and feel rich again. People will have to borrow to stimulate a recovery because money is created as credit, but also because with unemployment on the rise again, most people have little or no money for non essential items.

A recent article by Justice Litle of Tiapan Publishing Group outlines some of the reasons why housing prices are headed down instead of up. Here's an excerpt from the article:

"The troubles circle round in a giant feedback loop. Persistent weakness in the economy-high unemployment, high concentrations of temporary workers, and reduced wages for those who kept their jobs-are deterring would-be-home buyers from shelling out on new home purchases. Meanwhile, the much vaunted homebuyer tax credit is fading away. Like other forms of stimulus, it was a temporary remedy...a short-term goose, not any type of permanent solution. Thanks to the soon-to-expire credit, U.S. homebuilders are sweating bullets. They know that once the credit goes away, so will sales."

In addition to the problems mentioned in Mr.Litle's article, we can add the problem of lenders taking a more aggressive approach to collecting mortgage balances after foreclosure, thus forcing more potential buyers into bankruptcy. Municipal governments are already in deep financial trouble with deficit spending and out of control debt. When foreclosures rise or when people abandon their homes, they don't pay property taxes and revenue falls. Cities base their budgets and spending patterns on ever increasing housing prices resulting in ever increasing property tax revenue.

So there you have it folks. The housing market is not coming back for a long time and you should prepare for that because without increasing housing values the economy will continue to struggle and unemployment will remain high.

What can you do right now? Get out of debt and live a debt free life. Call me to discuss how that could be possible in your life. The conversation is free.

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SUMMER OF HUNGER
Posted by: Darrell Castle
June 16, 2010

Today we consider a report from AOL news regarding the problem of hunger facing millions of American children this summer as their free and subsidized food programs end for the summer. The report says that 16 million children face a summer of hunger. Here's an excerpt from the report:

"Schoolchildren gather for lunch in Milwaukee, Wisconsin where summer school will be in session this year for only four weeks-meaning hungry kids will increasingly rely on help from groups like the city's Hunger Task Force. The problem is not new of course, but indicators for a crisis are lining up. ...Demand for food stamps is already up. Demand at food banks is already way up. Donations however, are down."

The article goes on for several pages to discuss the problem of hunger among children during the summer. Transportation and distribution are problems especially in rural areas. Efforts are being made to recruit local sponsors to bridge the gap between what the Federal Government and corporate participation can do.

That this problem exists in America is an outrage. The Federal Government is now responsible for feeding the hungry children of America, but shouldn't at least some of the responsibility fall on corporate interests? We can give trillions to financial companies but we can't feed our children, and we can't ask those same financial companies to help. We can spend trillions fighting wars from which corporate interests profit but we can't feed our children.

How have we destroyed our families and our economy? Who bears responsibility for this? It seems that our priorities are greatly distorted in America right now. What can we do to put ourselves back on the right track? Nobody seems to know.

What can we as ordinary Americans do? Take careof your family. Keep your family out of debt. This is as good as it's going to get for a long time. Do your best to prepare for the future.

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MAY JOBS REPORT ASSUMES WE ARE VERY STUPID
Posted by: Darrell Castle
June 11, 2010

Last Friday the much anticipated May Jobs Report was released and it showed that 431,000 new jobs were created in May. That was a significant increase, and a tremendous boost to the stock market was anticipated. Instead the DOW fell 323 points losing 3 percent of its value.

It turns out that the market knows a scam when it sees one because ninety-five percent of the new jobs were created not by the private sector but by government as census takers. Bill Bonner of The Daily Reckoning referred to the pretense of announcing a huge jobs increase because of numbers invented by the government as, "people paid by the government to count the people who pay the government."

Here's an excerpt from The Daily Reckoning:

"The census takers illustrate our point. Government spending, including government jobs, does not really make us richer, they make us poorer. If you could make people better off by hiring them to count each other, why not count them twice, or three times? The trouble is, no matter how often you do it, or how well you do it, counting people doesn't add to our wealth; it takes away from it. It diverts resources-human labor-from worthwhile activities to activities that are a waste of time. The more people you hire, the bigger the waste, and the poorer you get."

There have been reports by census takers that they were fired then hired again just to make the jobs numbers look better. One would think that graduates of Harvard, Yale, and The London School of Economics, would be smarter than that.

The government acts duplicitous, I suspect, because it doesn't know what it is doing. No one can manage something as large and complex as a national economy. That fact has been proven time and again for 100 years, and very soon the government will be forced to admit it.

Times will soon be a lot harder for a lot of people. My advice to you is to get out of debt while it is still possible. Call me to discuss how this might be possible in your life. The conversation is free.

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