Financial Morons and Mormons

I work for a finance company owned by AIG (remember the bailout?). At the end of the month our delinquency has to be under a certain percentage. It is the end of the month so I've been dealing with some major hosers this week and I'm going to take a moment to give my harsh but honest opinion.

Some people are financially stupid and irresponsible. I'm sorry if that sounds mean but it is true.

Example 1: Brent has been late on every payment since he took out his loan. He gets a late fee around $20 every month. That is $240 per year. It's not a ton of money but it could be some one's entire Christmas.

I called him today to see if we could work things out where he pays within his grace period. Do you think he would be at all reasonable? He says that he won't and will just pay the late fee. What?! And he does! Every month he'll pay the bill but always with a late fee. Financially stupid!

My favorite was when I asked him why he couldn't pay on time. He told me that its because he didn't get a bailout like I did. I very sternly told him that I didn't get jack and I still pay my bills on time. Then I called him a bad word when I hung up.

Example 2: Jennifer has $15,000 in debt. All but $3,000 is either a student loan or secured by collateral (car, boat, trailer, etc.). One day I called her for her payment and she said that she couldn't make it and was declaring bankruptcy so she'd just drop the car off at our office.

Okay, lets go over this... you cannot include the government, i.e. student loan, in a bankruptcy (unless it is a private loan which most are not). If you want to keep your collateral you have to reaffirm your account and pay the loan. Does this make sense to her? Nope. The reason she made the choice is because she and her husband went to a lawyer for tax advice. He told them that they should declare bankruptcy. What?! Even if the husband had a lot of debt, Jennifer is not bankrupt. What a crap lawyer!

Example 3: Norma is like a million years old. She had good credit a year ago... then she cosigned on a loan for her son. Originally his credit was crap so she offered to help him get an $800 loan. Do you think he paid? Not a payment. Now I have to call Norma every day to try to get $40 a month from her. She hasn't answered in 2 weeks. I'm not even sure if she's still alive.

This is a perfect example of why you should never, I repeat, never cosign on a loan for someone unless you are prepared to pay it back yourself because the person you are cosigning with will default. There is a reason that people need cosigners. It shows on their credit that they can't be trusted to pay.

That is enough of my examples for now. I realize that sometimes people are bankrupt for good reasons (medical, etc.) and that is why there are laws allowing bankruptcy. However, I am sick of people that have boats, cars, trailers, four wheelers and other toys, all of which are new, and get so far in-over-their-heads that if some $1,000 emergency happens one month it destroys their house of cards and they "have to" declare bankruptcy. Then you see them the next day eating at Red Robin after they got their nails done. That's so immoral to me.

If you think I am exaggerating, I'm not. Every story I told is true, including Red Robin. We once had an LDS couple write to our manager requesting that we alter their loan to a 0% interest loan because they couldn't afford everything they have. They included a copy of their budget and gave themselves a hefty allowance for clothes every month. A clothes budget when you can't pay your bills?! Now, most people in my office are not LDS and I can tell you that things like that really damage the views that people of other faiths have about us. My boss told me after we talked about it that she really wishes that our church would say that bankruptcy (but she meant financial irresponsibility) is a sin. What do you say to that? "Um, I think it is and I pay my bills. The church tells us we should get out of debt..." But actions speak louder than words.

Thanks for reading. Now go out and spend money ONLY if you have it.