Blog Topic

Medical Bills
Posted by: Darrell Castle
October 16, 2009

Harvard University, in a recent study, revealed that about 62% of bankruptcies filed in2007 were related to health care expenses. More than 75% of those were due to high medical bills and health insurance issues over which the filers had no control.

In this day and age when the numbers of people without health insurance continue to climb, incurring medical bills that can't be paid is nothing to be ashamed of. The job loss rate is rising each month which means more and more people out of work and out of health insurance. In my experience the increasing numbers of people without health insurance is growing because the unemployment roles are growing. When people lose their jobs, quite often they lose their health insurance.

The numbers of people without health insurance will come down when people go back to work. People will go back to work when they have jobs to go back to -- jobs in manufacturing, not service. Americans must be allowed to produce things that other people want to buy or there is no economic recovery. No economic recovery means rising bankruptcy filings, rising unemployment numbers, rising foreclosure numbers, and rising numbers of people without health insurance.

We live in an age of technological advantage but we still seem to be affected by the same diseases such as cancer and heart disease except in greater numbers. As I mentioned before, having medical bills you can't pay under such circumstances is nothing to be ashamed of. Consider living your life without debt. Contact The Law Offices of Darrell L. Castle & Associates for a free consultation with one of our experienced bankruptcy attorneys.

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Foreclosures Set Record
Posted by: Darrell Castle
October 15, 2009

"Despite concerted government-led and lender supported efforts to prevent foreclosures , the number of filings hit a record in the third quarter." This information comes to us via a report issued Thursday as reported by CNNMoney.com. According to the report, the last three months were the worst three months of all time for foreclosures. During that time, 937,840 homes received a foreclosure letter which means that one in every 136 homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.

Nevada had the worst record with one foreclosure filing for every 23 households. The tremendous number of foreclosure filings led to a record number of homes being repossessed by lenders. The third quarter saw 237,052 repossessions, a 21% increase from the previous three months. With more than two months to go, lenders have taken back 623,852 homes this year. These increases have taken place despite government efforts, with lender support, to slow the record pace.

A study concluded that when home price declines drop home values 10% below the mortgage balances, people start to give up their homes. When the negative equity approaches 50%, 17% of households default even when they can still afford their payments.

This crisis is not expected to end quickly. With millions of properties now back in the hands of lenders, if these properties are suddenly dumped on an already depressed market it will crater even further. The unemployment rate continues its relentless increase thus making it harder and harder for people to stay in their homes. When will home prices start to increase and things turn around? This will not happen for a long time because the pool of distressed and abandoned homes increases every day and that will continue to force home prices down.

Consider scheduling a free consultation with the experienced attorneys at The Law Offices of Darrell L. Castle & Associates.

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Growing Numbers of Small Banks Failing
Posted by: Darrell Castle
October 12, 2009

This from the front page of the Sunday edition of the New York Times, Sunday October 11, 2009, "a year after Washington rescued the banks considered too big to fail, the ones deemed too small to save are approaching a grim milestone: the 100^th bank failure of 2009." The Times article goes on to point out that 100 banks represent only a tiny fraction of the total number of banks in the country, but their failure is an indication of a growing divide between the large "too big to fail financial institutions" and the small community banks. Last year there were 28 bank failures nationwide, but this year 100 already with 2 ½ months to go.

Two years ago the Federal Deposit Insurance Corporation (F.D.I.C.) had over 50 billion dollars in assets and now it is essentially penniless. The F.D.I.C. insures the bank deposits of millions of Americans. The insured limit was recently raised to $250,000. Very few people have more than $250,000 on deposit with local community banks, but people might be surprised to learn that the federal institution responsible for insuring their deposits is essentially bankrupt itself. Bank failures are creating great hardships for many local communities since local banks do most of the lending to builders and property developers. Local builders usually survive through credit issued by local banks and without builders constantly building and expanding the property tax base, local communities are in real economic trouble. According to the Times article, local banks loaded their lending portfolios with loans to builders and property developers because of lost credit card and residential mortgage business wrested away by those competitors the Federal Government has deemed "too big to fail."

Bank failures reinforce the sense of gloom that now hangs over the economy. People aren't surprised when local retail companies go out of business, but banks aren't supposed to fail. The F.D.I.C. does insure bank deposits up to $250,000 although to keep taking over failing banks might require the company to either do business on credit or drastically raise fees to member banks which might accelerate the problem. It might surprise people to know that if the F.D.I.C. has to pay off on an insured account, it has up to 10 years to do so. This could potentially put a real hardship on those who depend on the bank deposits to survive financially such as retired people and others on fixed incomes part of which comes from those deposits.

So far in 2009 there have been no bank failures in Tennessee, but people should always monitor the status of their bank very closely. Consider paying off or at least paying debt wherever possible but if that is not possible consider other means of getting out of debt. Contact the Law Offices of Darrell L. Castle & Associates for a free consultation.

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UNEMPLOYMENT PART TWO
Posted by: Darrell Castle
October 07, 2009

Today, October 7, 2009 the American job market continues its relentless journey to the bottom. According to a recent article in Asia Times Newspaper, US jobs in September declined by about 263,000 jobs, worse than the 175,000 drop expected. "To the 15.1 million on the official unemployment count, add 9.2 million 'involuntary part-time workers' and 2.2 million who were dropped from the tally because they had not sought work inthe past month, and the unemployment rate would rise to 17.1 million." That doesn't include another three million long-term discouraged workers - those who want to work but who have long since stopped looking. That would take the number up to 20%.

Yes,I can certainly understand why being unemployed for more than a year with prices the way they are would tend to discourage someone. The government's borrowing to "stimulate" the economy is making a bad situation worse because it is pulling more and more money from the productive American economy. That is money no longer available to expand businesses, build factories, buy machinery or do the many other things to create jobs and put people back to work. In addition, spending by Americans is slowing partially because of the recession and partly because a higher percentage of them are nearing retirement with no savings and they have to quickly make up for it.

The small business sector, usually the engine of job creation, is suffering from a lack of bank credit. Money may be the mother's milk of politics, but credit is the mother's milk of small business and banks are reducing risk and withholding credit. What this all means for Americans is continuing job loss increases which will drive the foreclosure rate higher and also drive the number of those without health insurance higher. Health care reform is just talk without people working unless the government wants to push the American economy over the cliff.

What can one do in an economic climate like this? 1. Work hard and do good work so your company puts you on the last to go list instead of the first to go list. 2. Cut out all but necessary spending and get expenses below income so saving is possible. 3. Pay down debt if possible and if not possible consider other methods of getting out of debt. 4. Save for hard times because times are getting harder for many people.

Consider contacting the Law Offices of Darrell L. Castle & Associates for a consultation to discuss your financial situation. There is no charge for the consultation.

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Filings Continue to Increase
Posted by: Darrell Castle
October 05, 2009

Consumer bankruptcy filings increased 41% in September 2009 as compared to September 2008. Filings were 4% ahead of the August 2009 rate and over 1 million people filed for bankruptcy relief in the first nine months of 2009 according to figures released by the American Bankruptcy Institute. People are looking to rid themselves of debt as they lose their jobs and the value of their homes continues declining.

The job news is getting worse according to the New York Times 1 in 10 workers is unemployed and there are 6 applicants for every job that is available. Since March of 2009 the U.S. has lost 2.5 million jobs and it has lost jobs every month since December 2007. The unemployment rate at about 10% is the worst in 26 years.

Until people return to work in large numbers the economy cannot make a genuine recovery and it will be hard to increase employment without a manufacturing base to employ people. When people are desperate, they default on their home mortgages and car loans in great numbers and defaults are increasing. This economic down turn, recession, depression or whatever you want to call it is starting to get a great depression 1930's feel to it. Let's hope it doesn't end the same way.

Should you wish to discuss financial problems with an experienced attorney call or email The Law Offices of Darrell L. Castle and Associates. There is no charge for the consultation.

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Foreclosures On The Rise
Posted by: Darrell Castle
October 01, 2009

According to the Mortgage Bankers Association's National Delinquency Survey the delinquency rate on residential mortgage loans rose to 9.24 per cent of all loans outstanding as of the end of the second quarter of 2009. The current delinquency rate is the highest since the MBA begin tracking the data in 1972. This information was reported in the September 10, 2009 issue of Consumer Bankruptcy News. The combined percentage of delinquent loans plus those in forclosure was 13.16 percent, the highest ever recorded in the MBA survey.

These are truly scary numbers for the economy as a whole but especially for individual home owners. These numbers mean that 13.16 percent of all home mortgages are either in foreclosure or at least delinquent which quite often means eventual foreclosure. In my opinion, this is all being driven by increasing unemployment numbers. People who don't have jobs can't afford their mortgage payments.

Voluntary loan modification programs may be the answer for some, but for others Chapter 13 is the answer because it is binding on the mortgage company when the Chapter 13 plan is confirmed by the bankruptcy court. For many people however, neither option is possible because they have no income.For others unemployment compensation is enough to allow a confirmed Chapter 13 plan and hopefully a return to work before the unemployment compensation runs out. Since delinquency rates are continuing to rise it appears that this condition will continue and even worsen for some time in the future. For many of those people chapter 13 can be a useful tool to avoid foreclosure. Contact Darrell L. Castle and Associates for a free consultation.

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Age of Thrift
Posted by: Darrell Castle
October 01, 2009

Last Saturday, September 19, 2009, the New York Times carried a story in which the Times reporter described how American society is changing from one in which we were all described as consumers to one where we are "cutting back" or at least "downsizing" what we have. This is also happening in the upper income brackets as even millionaires become more thrifty. This, of course, is exactly what I would advise a client having financial problems to do, that is cut back spending, reduce debt, increase savings, and take fewer risks. This turn of events should be very beneficial for the American family in the future but what is good for the American family is not always good for the American economy.

What does an economy built on continuous growth in consumer spending need in order to continue growing? That's right consumer spending at ever increasing levels, but it seems that Americans are no longer willing to borrow money they can't pay back to buy things they don't need. Unemployment is continuing to increase each month and mortgage delinquencies continue to rise as a result. People look first to debts they don't absolutely have to pay and walk away from them first. For many people these debts include credit card debts and medical debts, but for some it can include car loans and home mortgages as well. If a person had a $200,000 mortgage on a home now appraised at $150,000 his incentive to keep paying might decline and the desire to become free of the debt and free of the declining value asset might over ride his desire to keep paying the mortgage.

Its difficult for people to pay down debt or even pay the debt they have when they are unemployed. Even when covered by unemployment insurance the cost of living usually eats the unemployment checks. These are hard times for many peopleand there are no easy solutions but bankruptcy can provide some people relief from their debts and a fresh start to their financial lives. For a free consultation to see if bankruptcy can help you call the bankruptcy department at The Law Offices of Darrell L. Castle & Associates.

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