The collection agencies call at least 20 times a day. For a little quiet, Diane McLeod stashes her phone in the dishwasher.
But right up until she hit the wall financially, Ms. McLeod was a dream customer for lenders. She juggled not one but two mortgages, both with interest rates that rose over time, and a car loan and high-cost credit card debt. Separated and living with her 20-year-old son, she worked two jobs so she could afford her small, two-bedroom ranch house in suburban Philadelphia, the Kia she drove to work, and the handbags and knickknacks she liked.
Then last year, back-to-back medical emergencies helped push her over the edge. She could no longer afford either her home payments or her credit card bills. Then she lost her job. Now her home is in foreclosure and her credit profile in ruins.
Ms. McLeod, who is 47, readily admits her money problems are largely of her own making. But as surely as it takes two to tango, she had partners in her financial demise. In recent years, those partners, including the financial giants Citigroup, Capital One and GE Capital, were collecting interest payments totaling more than 40 percent of her pretax income and thousands more in fees.
More than a cautionary tale – after all, this describes an affliction affecting tens of millions of Americans.
after all, this describes an affliction affecting tens of millions of “North” Americans.
It is not just the US. It is everywhere.
Humans will exploit any ‘good’ deal.
This is how the Great Depression was worsened. The paying on time, the credit industry where people started their thirst for living beyond their means.
We are in a very similar situation now and it is because our government is NOT doing their job. The president is not living up to his oath.
So we are again headed for more sorrow.
Cursor_
The woman described in the article dug her own grave, spat on it, then dug it another 6 feet, then spat on it again and dug another 6 feet.
The writer is attempting to shift a chunk of the “blame” to the credit companies, while the woman describes quite clearly how stupid she was. He made a big deal about the 27% interest on… a jewelry account.
I have to say, I feel sorry for her son — he shouldn’t have cosigned for anything with her based on her history. But it’s hard to say no to a family member when you’re young and a little naive.
All in all, it’s a cautionary tale to stay away from stupid people with no will power.
After all, the woman lost her job by sending “an inappropriate email.” How incredibly stupid do you have to be?
This has alot to do with those back to back medical emergencies. Thank god I live in a country where a person still has a right to be alive and healthy. I’ve got a 20 y.o. nephew in the US who didn’t have a job so he didn’t have insurance. So one day he had high fevers and breathing dificulties – a visit to the ER plus the night in observation > $20,000. Now he has a debt he can’t pay and zero credit. From what I hear he’s been finding ‘less than legal’ means of making money. Probrably end up in the slam, at least there they’ll have to give him medical attention if he needs it. Came to Spain to live 20 years ago and glad I did. I ought to start a web to help americans emmigrate to more civilized societies. (It’s a lot easier than you may think!)
Living on the edge is fine until you trip. Even with decent insurance medical costs can be devastating. If you can’t work you lose your job, and any insurance that goes with it. I went through this in my thirties. The only hedge against it is savings.
Yes, the woman is an idiot. Just like crystal meth addicts are idiots.
The bigger story here, though, is that the predatory lending guys are like drug dealers, feeding the addiction of people who can’t control themselves.
It’s one thing when shady characters in back alleys are doing this. It’s quite another when our “captains of industry” are doing the same thing.
They should have their balls cut off.
This is loan sharking, plain and simple.
What’s the matter with this lady? Doesn’t she know the law of supply and demand will make her life and everyone else’s lives far, far better?
Eventually.
She just needs to borrow some money and invest in an international oil corporation. Then her life will be perfect again!
Finacial Piranha and Loan Sharks !!! Ought to be OUTLAWED and the Usury Laws REIMPOSED !!! Even Credit Card Crooks BLEED PEOPLE DRY !!!
<sarcasm
If we deregulate even more, the credit industry might be able to loan itself out of this mess.
</sarcasm
How do you maintain a standard of living you have been living for sixty years? For me it is almost impossible as my money goes away very quickly. I am insurance poor. I cannot afford to drive anywhere and my health is slowly going with age. My credit is on the edge of falling over the the waterfall. The television and the Internet want me to buy their products constantly. The best bet is to purchase at Walmart and let the poor countries become richer and let me get poorer.
It’s time we take financial responsibility for our own debt. I have adopted my grandpas idea of “if you can’t pay cash you don’t need it.” Do we really need 50 inch TV’s and boats and two homes…HELL NO! He lived on one income(his) and did just fine. This lady is definitely an idiot with two mortgages and a single mother WTF! And to have her stupid son ruin his credit at 20 I simply can’t believe it.
Diane, if you are a big beefy woman and a triple input – I’ll help you out.
Do you have a gallon of Mazola and a drop cloth? Duct tape? We’ll have fun!
#12 – Ketchy
>>Do you have a gallon of Mazola and a drop cloth?
Now that was tasteless.
At least you could have suggested using mayonnaise. We condiments have to stick together.
If it wasn’t for credit we would have no economy to speak of. If you asked someone if they would have bought that big screen tv if they had to pay cash. Most would reply that they could not afford it if they had to do that. I think many consumer’s missed how credit cards work. In fact credit companies should be forced to look at income and the ability to pay back the loan in a reasonable time such as 5 years. We need to be educating kids in school better about the financial responsibilities.We are raising kids that rely on debt to live!! The big problem is we think this is OK??
#11 – Outlaw
>>I have adopted my grandpas idea of “if you can’t
>>pay cash you don’t need it.”
That works, unless it’s a heart transplant or cancer treatment. Then maybe, even if you can’t pay cash, you DO need it.
I don’t think there’s a question that most people are weak, no matter what walk of life, what country you’re from, or even what century it is.
Lending institutions are in it for a profit and have been since their inception. They are happy to prey on human weakness and will push it to the limit any way they can, every time.
This lady and millions of others have a problem often exaserbated by poor judgement, a series of bad choices and more often than not, bad luck. They need help, not ridicule.
I don’t think it’s a stretch to believe that people tend to lie more about money than any other aspect of their lives… often even lying to themselves.
Debt is a house of cards. Avoid it if you can at all costs.
Needs versus wants, tempered by reality! It’s always a dilemma!
Cheers!
—RASTER
Now let me get this straight. You can’t borrow your way out of debt? Damn. My financial planner at Citi Corp. told me that’s how the big boys do it. Shit, I’m dropping them and going over to the fellahs over at Chase to help me get outta this hell hole.
There are compulsory gamblers, and there are compulsory spenders. I feel no sympathy for either. You want to “look” rich, then take responsibility and stop blaming the government.
God sakes, are ALL these people digging themselves into credit graves so lazy that they truly don’t read what they’re about to sign?? And then they have the gall to blame banks, mortgage companies, and credit card issuers?
I don’t care if it’s a rental agreement at U-Haul, or a second mortgage, or a credit card. If you don’t read what’s put in front of you before you sign it, you deserve whatever you get.
i wann know… when are the lenders in debacle gonna get punished?? how can the leaders of these institutions get away with this??? how can someone pulling in millions in salary drive an entire economy into a depression??? (make no mistake we are in a depression, we are bailing out banks) hell i could have done just as good of a job as these imbecills, and i would have charged way less for my pay… 🙂
#20…punished? You make me laugh. 😉 They just bought better bankruptcy laws that prevent them from losing when debtors default. This industry has congress, and for that matter most of the US buying public, by the short hairs.
One thing we need is laws or consumer loan regulations that prohibit minimum payments less than 5%, or maybe higher for unsecured credit debt. The shift from 5% to 2% minimums allowed VISA and Mastercard to earn billions, and was also the beginning of this spiral.
I get that we are a nation in debt. They run stories about it ALL the time. But what are we going to do?
Less talk about debt people and more action on getting out of it, regardless of who is at fault.
I have no sympathy for these people.
Blaming credit card companies for outspending your income and running your life into the ground is the same as blaming a drug dealer for selling.
Ultimately, its YOUR choice to either be a cost-conscious consumer who lives within their means or a hyperconsumer (like this lady here) who spends every penny they have, and then takes out lines of credit to perpetuate the myth that they are ‘successful’.
Here is the problem:
Inflation(Everything is becoming more expensive + Wages and job creation are stagnant) + Easy Credit = Debt * Everyone = Financial Collapse?
While these people are complicit there is enough blame to go around. During the period this woman was running up her credit card debt the real interest rate was negative. If you have a negative interest rate how much money do you want to borrow? The savvy answer is: all of it.
This is exactly the same issue as the securitization of mortgage loans. You are intellectually dishonest if you treat corporate deadbeats and individual deadbeats differently. The woman mentioned in this article is SETF(Small Enough To Fail).
A large proportion of bankruptcies involve serious medical problems. In any other industrialized country this woman would have received medical attention at minimal personal cost. This medical system would be, per capita, much cheaper to operate than the American one. It would also, very likely, produce a much healthier public.
Credit card companies specifically target the people most likely not to be able to pay back their debt. There is a name for this: loansharking!
Corporations are able to roll their short term debt(similar to credit cards) into long term debt(similar to loans) easily under ordinary market conditions. Individuals get hosed by the credit cards and are only offered consolidation after they are ruined.
There is an social problem (excessive materialism)and an institutional problem (total lack of regulation) going on.
Am I dreaming or is this real? TV commercials for up to $2,000 cash, right now! No credit rating reqd! But the small print reveals an APR in excess of 70%. Aren’t there usury laws for that?
I need to leave the DVR on and snap some photos of that small print that lasts maybe 1.1 secs.
With no body at HOME to teach your kids HOW to handle money..
With Little money AT HOME, what is there to Give a kid to TEACH them HOW to use money.
HOW MANY of you know HOW to use money..
do you know the words “Seed capital” or “Seed money”..And HOW to use it.
How many of you REALLY, know how to start a Life, business, with money.
How many of your wages, have increased over 30% in the LAST 8 years.