Northern California Bankruptcy Lawyer

On The Bankruptcy Soapbox

The Soap Box

How Chapter 13 Saves You Money

By

chapter 13Why should I file Chapter 13  if I have to pay all my creditors in full?

Because, I said, even a 100% repayment plan under Chapter 13 saves you money.

This client had a fistful of equity in a home;  that equity made a Chapter 13 the required choice of chapter for the man.

But he struggled with finding the benefit of using Chapter 13 to manage his debt.

I never would have filed bankruptcy if I realized I had to pay everyone 100%.

So I fired up Excel and crunched numbers to quantify the answer to “why file“.  In this client’s case, the answer was $20,000. 

When asset value drives Chapter 13 payment

Chapter 13 saved $20,000 over 5 years when compared to paying all the creditors what they were owed outside of bankruptcy.

It’s all about the interest rate

At base, the $20,000 bankruptcy savings for this client flowed from the difference between the interest rate in bankruptcy compared to the interest rates on taxes and credit cards in the non-bankruptcy world.

When creditors are entitled to get interest on their claims in bankruptcy, the interest rate that applies is the federal judgment rate.  When I did this exercise, the federal interest rate was 2.35%.  Find today’s judgment rate.

By contrast, I assumed credit card interest rate of 23% and the IRS interest rate to be 6%.

13 crushes credit card debt

Paying the approximately $39,000 in credit cards in 5 years (the same duration as the Chapter 13 plan)  according to contract terms netted the credit card issuers $27,000 in interest!  The total cost to pay off those cards was roughly $69,000.

The cost to pay off the same $39,000 in cards in Chapter 13 was $2250 in interest and $4121 in Chapter 13 trustee commission (assuming the maximum allowed rate of 10% of dollars the trustee receives.)

So, which would you rather pay to keep your house and get rid of your credit cards:  $27,000 or $6365?

Point: Chapter 13

Taxes score a draw

The savings on paying off taxes through Chapter 13 was less dramatic.

We were looking at $46,000 in taxes, some priority, some older than that.  To pay them off outside of bankruptcy would run up about $7300 in interest.

Paying those same taxes in Chapter 13 incurred $2550 in interest. But when you added the trustee’s commission to the bankruptcy interest, the transaction costs essentially equaled the cost of paying the taxes outside of bankruptcy.

Point: neither side

Snoozing creditors lose

The unpredictable further savings may lie in creditor ineptitude.  That’s because only creditors who file a timely proof of claim in a bankruptcy case share in the payments.

In my experience, it’s the rare case when every creditor follows through and files a claim.

So my client will get a discharge of all his liability to creditors who don’t file claims, without paying them a cent.

Point: too soon to tell

Non economic benefits

Here, we looked only at the dollars and cents differences between paying everyone in bankruptcy or outside of bankruptcy.

Not visible in a spreadsheet is the reduced stress that Chapter 13 brings, by corralling all creditors in a single proceeding and having the law to back you up on the schedule on which they are paid.

Stress kills

Chapter 13 keeps you in control of your assets, protected by law, while you pay off what you owe.

 

 

 

 

Which Debt Collector Threats Should You Be Afraid Of?

By

debt collectors

Threats are the tools of the trade of debt collectors.

Why not? Fear is effective to get people to do stupid things.

That’s why debt collectors use it.

Pay up or…

  • we’ll send you to collection
  • we’ll sue you
  • we’ll ruin your credit
  • we’ll have you arrested
  • we’ll have you deported
  • we’ll take your house
  • we’ll tell your neighbors

Terror shuts down rational thinking and upends priorities. 

No passion so effectually robs the mind of all its powers of acting and reasoning as fear.

Edmund Burke

As a bankruptcy attorney, I  meet lots of people because they’ve panicked.  A debt collector has threatened them financially, and they are sure their world is coming to an end.

So let’s talk about debt collectors and the threats they use.  Just which threats are bluster and which are blockbusters.

Here are the questions to ask yourself.

How real ?

Is the threat real?

The classic scam is the one that goes:  we’re the police, we’re coming to arrest you for failing to pay, unless you want to send us money not to arrest you.

There are so many things improbable with this pitch that it’s amazing that it works.  But it does.

A variation is the collection call for a debt that isn’t yours.  Scammers  have invented a debt you don’t owe and hope to frighten you into paying rather than risk it.

Threat assessments:  it only pays to get worked up about debts that are real.

How soon?

Debt collector threats depend a lot on a sense of immediacy.  They want you to think that horrible consequences will follow immediately if you don’t pay.

This is where a bit of knowledge about due process comes in handy.

The legal system does provide for coercive legal methods to collect real debts.  But those coercive methods are available only after a dose of due process:  here, due process is a notice and a hearing.

Notice of a law suit filed against you, and a hearing on the merits of the lawsuit.  And those things take time and money.

A creditor with a meritorious claim can usually get a judgment, but it will take several months, at best.

So a smart debt collector wants to trade on your ignorance about law suits and to make you believe that he has instant access to the legal levers of collection.

The only creditors who can take money from your bank account without a court judgment are the taxing authorities and the bank where your money is on deposit.

Threat assessment:  the threat is real but it’s a long way off.

How damaging?

My favorite threat in this category is the infamous threat to “send you to collections”.

So?

“Collections” isn’t a real place.  You don’t get locked up in “collections”.

Being “in collections” doesn’t change your legal rights, or expose you to collectors with superpowers.

It’s just a management category for a creditor.

In fact, the collections department may be more willing to cut a deal on the debt than the people you’re talking to now.

Another favorite threat is the one to “ruin your credit”.

Even damaged credit heals with time and attention

It pays to know that creditors are limited to reporting the truth.  So, threat or not, they should be reporting the actual facts.

Is your credit really the most important piece of this puzzle?  Your “credit” mostly measures your ability to borrow more money.  The problem at hand is that you can’t pay for the credit you already have.

Threat assessment:   pretty weak, in the scheme of things.

How come?

Once you’ve assessed how real the collector’s threats are, it’s time to think about the big picture: is this debt an isolated problem? Or, are there other debts that will  ripen into similar problems?

Are you spending today’s income paying for yesterday’s expenses?  Are you shorting your emergency savings and your retirement account?

A sit-down with an accredited credit counseling service (not a debt settlement outfit) or a bankruptcy lawyer can help you identify and act on a plan for a solvent tomorrow.

More

Can you go to jail for not paying creditors?

Secret alternative to bankruptcy

Find The Right Cure for Your Debt Problems

By

Get-out-of- debt advice and sales pitches abound.

Like this one.

But no one tells you that you need a diagnosis of your financial ills before prescribing the cure.

Is the stomach ache indigestion or appendicitis?

Is it temporary upset or a life threatening money pit?

The answer makes a big difference in how you treat it.

No single prescription

A doctor treating your illness wants to know your age, your medical history, other medical conditions along with your symptoms.

Same sort of questions arise if debt is what ails you.

  • Age
  • Dependents
  • Current income
  • Assets
  • Debt total

All of those factors interact to shape a treatment plan for debt.

If you are on the cusp of retirement, you don’t have time to tackle big debt by cutting out frills in the budget.

If you are young, single, suitably employed, the prescription may be different.

So don’t take to heart every buckle-down-and-pay scheme you find on the internet.

Too little, too late

Most get-out-of-debt advice is better suited for living economically after you’ve solved the debt problem.

Fewer lattes, more eating at home, less entertainment spending.

Compare bankruptcy with payment plans

That may work to get out of debt if you have time, discipline, and modest debt to start with.

But the starting point is comparing your income to your debt, in light of your fixed expenses.

How big is the problem?  To bring it down, do you require a pellet gun or a bazooka?

How precarious are things

The final question is how risky is the treatment?

Think of the endless lists of common side effects and serious complications listed with every medicine you take.

When the ailment is debt, the risk is living with no reserves.  A recent study found 40% of Americans couldn’t pay for a $400 emergency without borrowing.

Four hundred dollars isn’t much in this economy.  Yet a $400 expense would imperil a huge swath of our citizens.

It’s easy to fool yourself into thinking that you aren’t likely to face an emergency.  Look at this list of pretty mundane things that require a $500  fix.

None of those are so far fetched that they couldn’t happen to any of us.

So living without a financial safety net in order to pay of big debt is big-time risky.

Here’s a further discussion of  my diagnostic of your debt alternatives:  when to hold and when to fold.

 

 

California Homestead Works In Other States, Too

By

California homestead law drives bankruptcy exemptions even for those who no longer live in California.

Strange, when the homestead statute was state law originally written for Californians.

Two things have expanded its reach:  bankruptcy “reform” and the concept of extraterritoriality.

The third driver, of course, is mobility:  we seem much more likely these days to have moved between states.

I was reminded of the long reach of the homestead last week by a call from a couple in Colorado.

They used to live here,  were filing bankruptcy in Colorado, and wondered if they could use the California homestead to protect their Colorado home.

The answer, on their facts, is YES.

So here’s how that works.

California exemptions for former residents

The 2005 amendments to bankruptcy law tried to limit debtors from moving to a state with more generous exemptions before filing bankruptcy.

Several states, most notably Texas and Florida, have an unlimited exemption for the value of your home. Shack or Taj Mahal, if you live there, it’s protected from creditors.

So the Congressional “fix” was to say that if you hadn’t lived for two years in the state where you filed bankruptcy,  you must use the exemptions from the state in which you lived two years ago.  (It has a few more wrinkles, but broadly, that’s the new law.)

The folks on the phone were California residents two years ago, so they “must” use California exemptions to protect their home in Colorado, where they will file.  Instead of the $75,000 homestead in Colorado, they can claim the $100,000 exemption provided in California law.

Neat.

Homestead beyond California

Extraterritorial is a long word for the idea that the state law in question applies to property outside the territory of the state.

The concept gained importance with the 2005 changes to bankruptcy law.  What if the state you lived in two years ago doesn’t allow extraterritoriality?

Some states hold their exemptions have extraterritorial effect;  other deny extraterritoriality.

North Carolina, for example, limits use of its state exemptions to residents of North Carolina.  See the lawyerly piece by my friend Billy Brewer.

By contrast, California’s exemption laws are available for property  outside the state.  The 9th Circuit case of Arrol, decided long before bankruptcy “reform”, allowed the debtor who had just moved back to Minnesota to claim a homestead the Michigan house in which he lived in a bankruptcy filed in California.

More on where you file and what you claim exempt

Bankruptcy law required that he file in California, having just moved back to Michigan less than six months ago.  The appeals court said that California law, where his case was filed, applied to the home he was living in when he filed, even if it was outside the state of California.

California allowed extraterritorial application of its exemptions.

If Arrol had moved from North Carolina to California, he couldn’t use North Carolina exemptions because they don’t apply to non residents.  The laws of North Carolina aren’t extraterritorial.

In that case, the debtor can use the federal bankruptcy exemptions if the exemptions of the required state aren’t available.

Home truths

The moral of this piece is bankruptcy can be complicated for the well-traveled debtor.

Choose an experienced bankruptcy lawyer; share the tale of your travels; and explore your exemption options.

More

California homestead is a superpower

A homestead isn’t what you think

Secret bankruptcy exemptions

 

 

Chapter 13 Dismissed After All Payments Are Made: Self Inflicted Wounds

By

Debtors shoot themselvesThere’s been a rash of bullet-ridden feet lately in Chapter 13 cases.

Debtors seem to whip out their pistols and shoot themselves in the foot with increasing regularity.

Just when their goal of keeping the house was within reach, had they paid attention, they lose it all.

It happens when debtors don’t hold up their end of the bankruptcy bargain.

And at the end of the day, or the end of the plan, they get none of the benefits they sought through bankruptcy.

How does that happen?

Chapter 13 saves houses

The overwhelming majority of Chapter 13 cases in the Bay Area are filed to save a house.

The homeowner needs to catch up on payments, or more frequently, needs a loan modification in order to keep the house.

The Bay Area bankruptcy judges have developed procedures to confirm Chapter 13 plans, and get money flowing out to creditors, while a loan modification is under consideration.  If there is anything we know about loan modifications, it’s that they take time and persistence.

Troubles after the loan modification

One of the provisions of the Chapter 13 plan that the debtor proposes for confirmation by the court addresses how the mortgage lender will be paid while we wait on a loan modification.

The plan might provide that the debtor will make the regular payment, according to the loan terms, directly to the lender in the meantime.

Or, the debtor may propose to make an ongoing payment to the mortgage lender calculated according the the HAMP formula, which says that housing costs should be no more than 31% of a person’s gross income.

So, the HAMP payment to the lender works out to be 31% of monthly income, less property taxes and hazard insurance.

Whichever approach the debtor chooses to deal with the current mortgage payment, it’s set out in the plan, along with the monthly payment the debtor will make to the trustee toward other kinds of debts.

Once a plan is confirmed by the judge, it binds all parties, creditors, trustee and the debtor.  See §1327.

Only some debtors seem to forget their part of this deal.  They don’t make the ongoing payments and don’t modify their plans to match their behavior.

Confirmed plans when loan modification denied

Another variation on our Bay Area plan is the plan provision that says “if I don’t get a loan modification, I will immediately modify the plan or surrender the house”.  I’m paraphrasing the language but the idea is clear:  if I can’t modify the plan, I’ll present an alternative plan to the court.

And then the homeowner doesn’t get a modification, and doesn’t present another plan.

And apparently expects good things to happen despite the failure to live up to his post bankruptcy promises.

Discharge depends on plan performance

The debtor in a Chapter 13 gets a discharge “after completion of all payments under the plan”.  §1328.

The payments “under the plan” include those that the debtor undertook to make directly, rather than through the Chapter 13 trustee.  (In the Northern District of California, we don’t do “conduit plans” where even the post filing mortgage payments are made to the trustee.)

When it comes out that the debtor hasn’t made the on going payments or hasn’t gotten a loan modification, more and more Chapter 13 trustee are recommending that the case be closed without a discharge, since the debtor failed to meet his promises made in bankruptcy.

Ouch!

Candor works

Facing up to a change of heart about a house, or the painful failure to get a loan modification, seems tough at the time.

What debtors seem to be missing is that all the non-house benefits of a bankruptcy discharge are squandered if the Chapter 13 gets closed without discharging those debts.

The other factor that is probably not obvious to the distraught homeowner is that foreclosure does not always follow immediately from the announcement that the debtor elects to surrender the house.

The foreclosure that took forever

Even when we want lenders to foreclose on unwanted property, they don’t.  Or don’t very quickly.

It is not as though the debtor will be immediately homeless if they admit it isn’t working out.

This is my clarion call to debtors:

  • Keep your bankruptcy lawyer in the loop about mortgage payments and loan modifications.
  • Keep a copy of your Chapter 13 plan handy and review what you’ve promised to do in exchange for the protection of the automatic stay and the discharge at the end of the case.

Your lawyer can’t help you if you keep secrets.

More

Roundup of our best advice on keeping your house

 

The Secret Alternative To Bankruptcy

By

alternatives to bankruptcy

Looking for the secret alternative to bankruptcy which will solve your debt problems without filing?

Why not?

Ads for debt settlement companies and do-it-yourself books always promise to reveal the tricks to make your bills vanish for pennies, without resort to bankruptcy.

(Isn’t it interesting that these “secrets” are known only by people who want to sell you something?  A book, a debt settlement plan, a seminar?)

I’m tempted to ask clients who ask about the secret bankruptcy alternatives: do you also believe in the tooth fairy, Santa Claus, and leprechauns with pots of gold?

Unkind, I know.

But in the information age, it ought to be obvious: There are no painless, quick fixes.

Settle your debts for pennies

Yes, it is theoretically possible to get a settlement of each of your debts that gives you the same result as bankruptcy.

But it is seldom a realistic option because

  • It requires cash to pay each settlement
  • It requires 100% of your creditors to agree to terms
  • It takes time and effort to negotiate deals
  • Not all creditors are prepared to deal
  • It’s dependent on no negative financial changes in the future

And in the meantime, your credit report gets trashed.  Often, the unpaid creditor sues.

What to do when you’re sued

Then there’s the nasty tax consequence of settling debt.  Forgiven debt is treated like cash income.  And income is subject to tax.

The debt settlement folks have no power to make it otherwise.

Why bankruptcy works

Bankruptcy works because it binds all creditors.  All creditors, even the IRS, have to stop collection action.

If they don’t, a federal judge is available to make them stop, and pay for having violated the automatic stay.

Bankruptcy limits any payment to creditors to the value of your assets today, after giving you credit for exemptions.

After the bankruptcy discharge, the debt that is wiped out is gone forever.

The bankruptcy discharge generates no tax consequences.

Get on with life

People in debt need relief from the stress that debt brings with it.

Stress actually makes you stupid

They need to save for retirement. They need to create an emergency fund.

They need these things NOW.

Bankruptcy does that. No secrets; no magic, no kidding.

More

Questions to ask a bankruptcy lawyer

How much should bankruptcy cost

What you keep after bankruptcy

 

 

Bankruptcy and “Ruining your credit score”

By

 

No matter how precarious their financial situation, almost every client I meet thinks bankruptcy will ruin their credit score.

Not only ruin it, but damage it for all time, precluding normal life after bankruptcy.

Some resolve to stagger along, burdened with their debt and the fear of escaping debt.

So, my encounter with a financial columnist was on point.

Liz Weston, L.A. Times financial writer, lead a room full of bankruptcy attorneys through the impact of various life events on  one’s credit score.

She recounted how, after meeting some debtors as she worked on stories, she no longer saw debtors as deadbeats.

She saw the challenges in their lives and the soundness of electing bankruptcy. Her candor about the change in her world view was refreshing.

Having written a book on credit scoring, she naturally was caught up in the interface with bankruptcy.

But as one who is frustrated by the fixation of those drowning in debt on their credit score, I wanted to stand up and shout:

 Ruin your credit score, not your life!

The financial media sounds a drum beat that one’s life and worth is wrapped up in that credit score.  All the while,  that score is something  we don’t fully understand and  is based on credit reports which are notoriously inaccurate.

Life will end, we’re told, if our credit score declines.

Poppycock!

That fear keeps American consumers struggling to pay debt that they can never repay, in this life or the next.  In order  to preserve their credit score, they appear resigned to a lifetime of minimum payments rather than a fresh start in bankruptcy

As Liz pointed out, the credit score is dynamic: it is constantly changing, and heals over time.

My call is to fix your balance sheet.

  • Get rid of dischargeable debts.
  • Save for retirement.
  • Live beneath your means.
  • Have some reserves.

Don’t walk the financial tightrope.

Image courtesy of terwilliger911,? pursuant to a Creative Commons license.

Don’t Trust Anything Your Lender Says On The Phone

By

 

 

Don’t trust the loan servicer for a moment, was my advice to the client who was trying to track payments he’d made on his home mortgage .

The mortgage industry has created an inhabited accounting swamp around your home;  the lender’s representative lives in that swamp.

Don’t turn your back on a carnivorous predator.

I’m sad to foster cynicism and us-them ways of looking at the world. But that’s my best legal advice.

Don’t rely on anything the loan servicer tells you on the phone.  Nothing.

Use what you gather on the phone as clues, but draw no conclusions from what you’re told.

Why customer service can’t be trusted

Money lies at the heart of the loan servicing problem.  Good customer service is expensive.

The outfits who are contracted to collect the payments on your home loan operate on narrow margins in a competitive business. Cheaper is better (for them).

People:  The obvious place to reduce your costs and make more money is to hire the cheapest employees you can get.  Short their training, and give them no flexibility in handling their jobs.

So, the voice on the phone trying to answer your questions is probably not up to the job.

Procedures:  When you get a written copy of how your payments have been credited to your loan balance, you often see payments posted, then reversed, then reapplied differently.

One of my colleagues reports a loan history where the servicer made SIXTY FOUR entries on the loan ledger in a single day.

One payment and they tried 64 different ways to credit it to the loan.

Handoffs:  The same servicer seldom handles a loan for the life of that loan.  Instead, the servicing rights are handed off from one servicer to another, presumably someone who will charge the owner of the loan even less to pretend to do the job.

Usually, what the new servicer gets doesn’t include any loan history  that you could audit;  the new guy just gets a series of single numbers representing, supposedly, the bottom line number in each column.

Phone calls don’t make good evidence

The fundamental problem with relying on what the servicer says is the phone:  How do you prove what was said on the phone?

Words are fleeting and misunderstandings are easy.  If there’s trouble, and there often is, there’s no paper record.

Oral agreements aren’t worth the paper they’re written on, goes the old saw.

Customer service leads to foreclosure

One recent client was dealing with “customer service” trying to determine how much money was required to bring the loan current before the foreclosure sale five days off.

Three days from the foreclosure sale, they admitted that the servicing had been transferred and they had no authority.

Worse, the new servicer said the loan isn’t in our system yet, so we can’t tell you.

When you’re in default

First off, don’t wait til the last minute.  Foreclosure is serious stuff and it deserves your full attention when you see the problem.

Use federal law to get the accounting and answers you are entitled to.

Don’t trust anything you’re told on the phone.  If it’s important, get it in writing.

If you need legal protection, start interviewing bankruptcy lawyers early.  Arrive at the last minute, and many lawyers assume you’ll be a rotten client.

 

Why Even Rock Solid Marriages Need A Prenuptial Agreement

By

ring-260892_1280_optPre nuptial agreements aren’t just for the rich or  mid-life marriages.

In California, pre nuptial agreements do far more than provide a blueprint for division of property at divorce.

A prenup can earn its keep for decades in marriages where divorce never enters the picture.

Why?

It protects the assets of the marriage from outsiders.

A prenup can limit what assets the creditors of one spouse can reach to satisfy a debt.  Let’s see how that works.

What’s a prenup

A prenuptial agreement is a contract between two parties, made prior to their marriage, that controls the ownership, management, and division upon divorce, of their assets and income.

After the divorce case of San Francisco Giants Barry Bonds testing his prenuptial agreement that denied his wife any part of his earnings during marriage, California prenups must meet a series of tests designed to make sure that the agreement was made knowingly and preferably with advice from a lawyer.

The California Supreme Court upheld the Bonds prenup, even though the wife had no lawyer, was disadvantaged by the agreement and had it popped on her on the eve of the wedding. That decision sparked changes to the law  to make more certain that both parties understood the arrangement and its consequences.

My interest as a bankruptcy lawyer in prenups is rooted in how a pre nup works during the marriage.

A prenup’s value lies in overriding the California  presumption that everything acquired during marriage is community property.

Community property is vulnerable

Community property is liable for the debts of either spouse incurred during the marriage.

Any debt.  Whether the other spouse knows about it or not.

Worse, the community property is liable for the debts of either spouse that they incurred before marriage.

In the absence of an enforceable agreement, California law makes everything acquired during marriage community property, including the wages of each spouse.

The result is that one spouse can find their wages garnished to pay a judgment their mate without any involvement from the spouse whose wages are garnished.  Ouch.

Cut exposure in half

Too often, the full ramifications of community property and the claims of creditors aren’t obvious until a business deal goes bad, or there’s a horrific accident, or the student loan collectors come round.

Then spouses see that everything they’ve acquired and their income going forward is liable to pay a crushing debt. Or at risk in a bankruptcy.

When giving isn’t a virtue

And often it’s too late to do anything that’s legally effective to move away from community property.  Post nuptial agreements not to have community property are subject to being invalidated as fraudulent transfers.

Fraudulent transfers include disposing of property without getting equivalent value in return , like giving stuff away.  Fraudulent transfer law also applies when you take actions after a debt is incurred that are intended to make it hard for an existing creditor to collect what he’s owed.

If a transfer is fraudulent, a creditor can invalidate it and reach the assets you were trying to insulate.

So, if you wait to reconsider community property until there’s a real need, it may be too late.

Weighing the risk

If you elect to alter the results of the community property system to limit exposure to creditors, you have to live with the consequences should the marriage dissolve.

A California family court has jurisdiction over the community property of the couple, but not over their separate property.  And separate property is what results by reason of a pre nup.

A family judge could still award family support and can also divide the family home even if held as separate property.  But other acquisitions may be beyond the reach of the family court by reason of how title to the asset is held.

So, a prenup is not without its own risks.

Who said marriage is easy?

When $400 Emergency Pushes You Over The Edge

By

 

The Federal Reserve reported that 40% of Americans couldn’t meet a $400 emergency without borrowing.  A significant slice of them couldn’t pay it at all.

So, a Bloomberg economist devoted his column to deconstructing how the press and political figures, in his opinion, misused that finding.

My God.

The guy was too caught up in quibbling about how the numbers were summarized to grapple with the human story beneath the numbers.

He took comfort in the fact that only 12% couldn’t borrow $400.

Emergency borrowing

What about those who could pay $400 by borrowing?

  • Where are they if another $400 emergency comes along?
  • If they didn’t have $400, what has to give in their budgets to pay back the $400 that they borrowed?

Payday lenders charge an average of 400% interest for a two week loan.  While touted as a vital service to low income communities without access to bank loans, payday lending is too often nothing more than financial quicksand. 

Access to high-cost credit: Federal Reserve study on its effect

Borrowing from family and friends has its own social perils. And it assumes that family and friends are better off than the borrower.

From where I sit in Silicon Valley, a huge swathe of America is living on the financial edge.

The shear cost of day to day living consumes their income and their energy.  Too often expected to individually fund health care, college and retirement, they find even multiple jobs, or the gig economy doesn’t allow a financial cushion.

What a waste of economic expertise to focus on the use or misuse of numbers and not address why so many are financially vulnerable.

 

643 Bair Island Road
Suite 403
Redwood City, CA 94063
Phone: (650) 694-4700

Categories