It used to be that if there wasn’t enough money in your account to cover a purchase, your debit card wouldn’t go through. If you happen to be among the millions of Americans who barely make it from paycheck to paycheck, you’re much better off floating a check the day before payday so it won’t get debited until the paycheck gets recorded. But many people have found that they can still use their debit card, then have to pay the bounced check fee anyway.

As described by Chris Plummer in a commentary at Marketwatch, this can add up to usurious fleecing of the consumer. Particularly if you allow the bank to automatically deduct some of your monthly bills, which can leave you short even if you think you should have money enough to cover lunch the day AFTER payday! Plummer does the math and notes that if you end up having to pay the bank a $35 overdraft charge on a $3.50 lunch purchase, the effective interest is 1000%.

Moreover, if somebody else uses your debit card – steals it and manages to find your code in order to use it, or (in many cases) a child or other relative decides to withdraw on a card you lent for a one-time use – YOU are on the hook. If it were a credit card, the lender’s money is at-risk, so fraudulent use has built-in protections that you won’t be stuck with the bill. Since that debit card can only access YOUR money, you have to pay regardless of theft and fraud.

Plummer details the risks very well, so do check out the link and arrange your money management accordingly. Pay your bills on line only after the paycheck has been deposited and immediate purchases are covered, don’t let the bank do it for you. Always get your card back from anyone you’ve given it to for a one-time purchase, to protect yourself against them using it when it will overdraw your account. Keep strict track of your usage and fees, and if they’re costing you a lot you can go back to a regular checking situation. Which may be more trouble and generate more paperwork, but will protect you from the bank’s greed as well as protect your financial privacy. Check fraud IS protected just like credit card fraud in most states, where debit card fraud is not.

If your bank account is like mine, your money flows through and doesn’t sit in the vault earning a lot of interest for you or the bank. The bank is in business to make money, not to make your life convenient. Don’t trust them with the details of your financial struggles or you may find yourself paying them a big chunk of your income every month for nothing.

The subprime mortgage crisis in just about over. Those whose loans came with usurious interest rates have, if they got behind or lost their jobs, already been foreclosed upon. Now the issue is negative equity, the fact that real estate is depreciating so fast that homes are no longer worth the price paid, even with prime interest rates. Being “upside down” and expecting a higher rate to kick in on the original price is causing more and more people to simply walk away from their mortgages.

And indeed, walking away from the debt may be the best option for people who purchased during the “bubble” of inflated valuation. Because the underlying problem the bubble was based upon – ever-increasing wages for the working classes – has dismally failed to materialize.

We’re all paying for the bubble and the ridiculous amount of side-bets that got made by financial pyramid schemers who artificially produced and inflated that bubble. When the “average” price of a below “average” home (say, 50 years old, in need of repair, in a bad neighborhood and too small for a family) rises above $120,000 in one of America’s “Officially Depressed Regions” where a majority of citizens are chronically out of work and wages hover right around minimum, you know something’s got to give. That’s how it is in my nearest county with an actual city in it – Buncombe County, NC, home to the city of Asheville (pop. less than 100,000).

See, the cost of living either keeps pace with what the semi-skilled or skilled laborer can expect to earn, or it doesn’t. Around here we’ve got a perpetual situation of “doesn’t.” This doesn’t just mean that the vast majority of the population must pay rent to the landholders who CAN afford the real estate, because the cost of rent is tied to the value of the property being rented. So if you have to pay $1200 to $1500 a month just for a kitchen, two bedrooms and a bath either way, the only difference between ownership and renting is that if you rent, the landlord has to fix the roof and furnace and plumbing. And when the average family with two full-time workers can no longer afford to live indoors and eat regularly, what are they supposed to do?

Economic greed of the sort that led us to this current “financial crisis” – is not just one of those deadly sins, it’s blind, deaf and dumb to its own interests. Stupidity of the inevitably terminal variety that we should NOT have to make good on after the crimes have been committed. A legitimate slave-owner had to provide food, clothing and ostensibly adequate shelter for his slaves. If they were starving they couldn’t work. If they were freezing or sick or naked they couldn’t work. It cost the slave owner money to replace his chattel, and the necessities of life had to come with the bargain. This hasn’t been so in America since slavery was outlawed. Of course there had to be a bad end to it all.

So now that the marginal debtors have been generally ‘liquidated’ in the first wave of cashing in our collective assets, the better debtors are scheduled to fall. As described in the Business section of the New York Times, this stage of the liquidation will cost more, be every bit as damaging, and is not expected to salvage any actual wealth for anyone but the bankers. It involves real properties so quickly falling in value that their prime mortgages are upside down enough that the debtors are simply walking away.

Those who don’t wish to walk away are being charged exorbitant fees for refinancing closer to value, and rising interest rates are also denting the effectiveness. Fannie and Freddie are big into this second wave heist, as apparently are Fed and Treasury. Just another way to clean out the higher end of the so-called “middle class.”

The bad news is that there is a building third wave building as well, as commercial properties either default or turn upside down. Soon there will be vast wastelands of once-nice suburban neighborhoods and shopping centers and malls where the homeless sleep at night sans utilities. They’ll be homeless even as millions of empty homes and apartment complexes sit dark and empty because no one owns them, they’re not worth buying and nobody’s renting.

In a future post we’ll take a look at some innovative options that abandoned property squatters can put to work for themselves toward necessary things like light, heat, cooking ability, water supply, sanitation, etc. – ways that people are either keeping the utilities on in a home they neither own nor rent/lease, or providing for themselves. Sure, these are the “future-slums” many complained they’d become when they were being built, but hundreds of thousands of once-productive Americans every month join the ranks of the “future-slum” dwellers they never thought they’d be.

To all but the top 10% of wealth-holders things are well beyond mere recession at this point, whether any talking heads want to call it that or not.

Another Scam Alert

CNN Reports that fraudulent “discount medical cards” are spreading like wildfire, and offers some hits on how to recognize a scam:

1. You learn about it from a blast fax or internet popup ad.
2. They promise a certain percentage savings.
3. They use the term “guaranteed coverage.”
4. They won’t give you a list of providers until you buy.
5. It sounds too good to be true.

Because these scams are growing and a matter of concern to law enforcement in a number of states, always check out an offer through the BBB, your state’s attorney general’s website, the Coalition Against Insurance Fraud and National Association of Insurance Commissioners.

One of my favorite series bloggers sarahnity has a weekly series at Daily Kos called “Frugal Fridays” that offers different tips and ideas every week, by her and a number of volunteer authors, on how to make your money go farther, how to earn money on the side, and how to hang on to what you’ve got. Last Friday the theme was frauds and scams geared toward those being most harmed by the current economy, entitled Don’t Get Fooled Again.

I’m just going to list the major confidence games going around in recent weeks/months, and the several resources and good advice offered to help people determine if something’s on the up-and-up or just more grifters targeting the weak to make themselves strong. The series is awesome, definitely worth bookmarking by all readers of this blog and checked every Friday afternoon for the latest in resources for the frugal.

The major scams making the rounds these days – particularly via the internet – are sometimes old and sometimes new. There’s the standard Work from Home sting where you have to pay to find out who’s hiring. If someone wants your money before showing you the want ads, it’s likely a scam. Real employers aren’t looking for you to pay them, they’re seeking people to pay for good work.

Then there’s the new-ish trick of Facebook identity theft where a clever grifter assumes an identity from among your networking ‘friends’ (often a relative) to beg for money. Be suspicious if someone on your Facebook page suddenly asks for money. Often the real person knows nothing about it – so check on regular email before sending anything.

There are also property tax scams going around where someone tells you you’re paying too much for property recently devalued. All you have to do is send money and the scammers won’t do anything for you. These can come in the regular mail too, so always do your homework and check with your real property tax officials about what’s what. If you really do pay too much, they’ll let you know for free. In line with this there are also housing and mortgage frauds, where someone offers you a “special rate” to refinance, take your money and disappear. Don’t fall for it.

There are more, of course. Please click on Sarah’s linked diary and check them out, there is good advice on how not to be victimized and who to report suspected scams to in your state and locality.

For those of us on the short end of the recent and ongoing mass looting of the economy by the kind of ant-populist robber barons who make Jesse and Frank James seem like do-gooders The Hardy Boys, there is now a historical record of the Fortune 500 CEO Hall of Shame in what could be printable trading cards outlining the shameful accomplishments of the Worst of the Worst.

Check out the card for Lehman Brothers’ Richard Fuld, whose stats list a total loss of $29 billion, while his personal take for the efforts comes in at a cool $71.9 million. Look at that punum… does he look suspiciously like a lizard? Then there’s Countrywide’s Angelo Mozilo, with a face only a mother (or a Sicilian Don) could love. Stats: in the loss column, a total of $22 billion. It’s the personal take that’s truly impressive – $225.7 million. This guy was good at being bad!

So if you’re overdue for an out-loud chuckle in the midst of economic meltdown designed to do the most amount of serious harm to the most number of honest, hard-working citizens, don’t miss this offering by BusinessPundit. It’s well worth the waste of card stock and color toner.

And while you’re busy surfing for news, giggles and brain-novocaine, go on over to CNNMoney to get the previews of the upcoming Super Bowl Ads, if for no other reason than to have them pre-listed and ready for votes at your Super Bowl Party this year. To be honest, that E*Trade talking baby gets me every time, even if it sometimes seems a little creepy what they make him say. Is this the CEO’s kid, or just some baby from central casting whose stage mom doesn’t mind his gratuitous sexualization?

Oh… and if you want a good conversation-starter for game night when both the game and the commercials get boring, check out GameJabs’ post about The 15 Most Controversial Superbowl Ads of All Time. Some of these aired and some of them didn’t, see how many of your football watching buddies remember the worst of ‘em.

Finally, if you’ve still got a job, at least one credit card, and are serious this time about getting your financial life in order, you may learn some useful strategies from Credit Card Matcher’s Plan for Paying Off Holiday Credit Card Debt. This site also offers reviews for the best card offerings for things like travel rewards and gas rewards to make traveling for fun and business a little cheaper.

Finally (last but certainly not least), if you or someone you know is planning to take the lemons of a tanking economy to make lemonade by starting a new business, you’ll definitely want to check out Brainz’s article offering 33 Ways to Fund Your Startup Business. Some of the traditional sources are drying up, but even as that’s happening some non-traditional, more creative methods of raising money are increasingly viable.

Links:

Fortune 500 CEO Hall of Shame
Super Bowl Ads: From Clydesdales to koalas
Travel Rewards Cards
Gas Rewards Cards
33 Ways to Fund Your Startup Business

Even way back last August, before the economy was officially in terminal free fall, the issues surrounding a college education were in the news. CNN Money asked, Is college still worth the price?

Most of us have come to understand how necessary a college degree – in anything – is to being able to ’successfully’ compete in today’s complicated modern world. Yet the costs of a degree – any degree – is soaring up to four times the rate of inflation even as both jobs and salaries for college graduates are shrinking. How much sense does it really make for families (or students, via loans) to pay $200,000 for a degree so s/he can get a job that pays $30,000 a year or less?

In a rational economy the rapid inflation of college tuition would slow, stop or even reverse as consumers – the pool of applying students – shrank in response to the spiraling costs. But for this particular commodity, there can be no shortage of applicants due to the recognized importance of said degree to the entire future of the prospective student. It is much easier to replace light bulbs and take public transportation to work in order to save on electric bills and gasoline than it is to forego a college education because it costs more than a graduating student can expect to earn.

Until the recent financial meltdown families felt fairly secure in their savings for their children’s educations, and college loans were readily available at low interest to finance most of the rest. Now the credit has dried up and the savings have been “liquidated” by failing Banks and Wall Street brokerages.

Some applicants are considering the traditional “Work Your Way Through College” option, but the kind of jobs a student can get part time in a college environment often pay minimum wage or even less. This won’t even buy a single textbook, much less pay a semester’s tuition. At this point the cost in time and energy simply isn’t worth it.

Some families are taking advantage of local Community College offerings, most of which have straight transfer programs to state universities following the first two years’ worth of standard requisites and humanities, which the community systems can offer much cheaper than universities do. In some states as worker re-training has become a serious mandate, the costs of tuition can be less than the amount available to students from the Pell Grant system. That of course doesn’t pay for textbooks (still outrageous) or transportation, but those same community colleges are offering more and more courses on-line so that students can do the work from home without having the transportation and meals expense.

Once in the system and receiving the Pell money, students are then eligible for other grants and scholarships the schools – including community colleges – administer. It takes a semester to get into the system, but this may be the least expensive way to do so. The system tends to follow the student – or even run ahead if she or he is obtaining scholarships for grade point maintenance – to the state universities, which have access to even more resources to help students cover the costs of their education.

The trick these days seems to be to avoid loans if at all possible, to NOT spend the savings the family may have accumulated and might still be worth something, but get the degree anyway. Very few careers actually require incoming hires to boast $200,000 degrees, so anyone not expecting to go into those particular careers should avoid the trap.

There are some good online sources for scholarships and grants as well that parents of high schoolers should be signing up with now, to give their kids the best competitive edge in applying as well as the early advantage of winning. Some of these, including FastWeb will target email alerts to what individual colleges and benefactors are offering in your child’s particular fields of interest as well as preferred schools according to your child’s profile. Peterson’s is a similar service, and either or both are highly recommended, FREE services.

So what’s the bottom line? Do what you have to do to get that degree, it’s still worth its weight in gold (and there aren’t a lot of good jobs around right now anyway). Just avoid debt if you can, take advantage of everything you are capable of using, plot your course carefully, and stick to the plan even if it takes longer to get that degree than you’d originally figured. Good luck and happy scholarship hunting!

Links:

The Cost of College In A Bad Economy
15 Ways to Set Yourself Apart in a Recession
Is college still worth the price?
Should your kid work in college?
Beat the college loan crunch
FastWeb: Scholarships, Financial Aid and Colleges
69 Free or Open Source Tools For Students

For those of us out there who still have work and a regular paycheck, and who managed to put some store-bought presents under the tree on Christmas, some shock and awe may be hitting home right about now when the credit card bills are received. Seems the credit card companies have exercised the clauses in the light gray 6pt type nobody ever reads to raise their interest rates and fees through the roof and cutting off available credit altogether no matter how good your credit score may be or how promptly you pay your bill. Some card companies have been creative about shuffling due dates at will, confusing customers and hamstringing small business, and some are refusing to even try to explain to customers what’s going on or what their options may be.

As Kathleen Ryan O’Connor explained in a recent CNN article, Credit cards gone wild: Shocking rate hikes, “Faced with the same economic pressures as other companies affected by the ongoing recession and credit crunch, credit card companies are racing to protect themselves from the costs of more defaults by hiking interest rates and slashing credit limits, even for cardholders with excellent credit histories.” Banking analyst Meredith Whitney predicts that $2 trillion in credit lines will be wiped out over the next year and a half.

As if to add a note of irony to the pain and suffering of consumers and businesses being screwed by their credit card companies, those new card offers are still coming in at the undiminished rate of one a day. One wonders if the marketing department ever even communicates with the front office!

There are ways to cancel your cards and pay out the principle at the old interest rate, but the companies are loathe to actually inform cardholders about this or answer pointed questions. Congress is expected to rein in this current ridiculous situation with emergency legislation early in the ‘09 session, and may even re-implace usury laws stricken years ago so that interest rates could rise as high as loan sharks disguised as credit card companies wished. Similar legislation was passed by the House in 2008, but failed to make it through the Senate, so the Fed, the Office of Thrift Supervision and the National Credit Union Administration imposed some new rules in December that companies are scrambling to get around by the current shenanigans.

Bill Shrink offers an overview of the 8 new rules, as well as Credit Card Bill of Rights: Which cards are complying? – a list of which card companies are obeying the new rules. If you’re disgusted with your company for pulling a fast one, Credit Card Guide has templates and instructions for exactly how to cancel your card in a way the company can’t simply ignore (as they too often do).

Once you’ve got your balance frozen at the lower rate and are paying it down, you may want to consider a new card or two that will allow you the convenience without making you feel as if you owed gambling debts to Mafioso thugs in Vegas. Go ahead and check for compliance on the BillShrink site linked above, then go on over to Credit Card Matcher to check out the Cash Rewards Credit Cards offers. Matcher also lists Gas Rewards Credit Cards offers, a good idea for both commuters and any small business that relies upon deliveries as part of its services. Don’t forget to balance the slightly higher initial rates with zero annual fees, thus making your overall expense quite reasonable. Then the rewards can be factored against that cost, and you the consumer can come out way ahead.

Finally, no matter whose cards you hold, open and read those incoming letters even if they look a lot like junk mail. Companies are using these to inform customers of sudden rate hikes, increased fees and limit freezes, and way too many customers are missing that notification. We can all hope the 111th Congress will step up to the plate and put a real lid on this outrageous usury, but none of us should be holding our breath. The recession (or, depression for many of us) is projected to last through 2011 at least, and some estimates don’t see the economy pulling out until 2017. We’ve got to control our spending habits, manage our indebtedness, and work especially hard to keep our small businesses going in a slow situation.

Happy New Year to all, and here’s hoping that 2009 will bring some relief from the ongoing mass looting of the nation’s wealth by the greedy and inept.

Links:

Credit cards gone wild: Shocking rate hikes
Cash Rewards Credit Cards
Gas Rewards Credit Cards
Bill Shrink: 8 New Rules
Credit Card Bill of Rights: Which cards are complying?

A very interesting piece of economic research appeared this week in ScienceDaily news service from the department of economics at Kansas State University, entitled Consumers Can Predict Inflation as Well as Professional Economists. This of course will come as no surprise to regular people, for whom economist’s double-talk is often seen as deliberately vague and couched in jargon that has no application to those in the lower echelons of economic stratification in this society.

Turns out that the actual price of milk and bread and gasoline can alert the average citizen of increasing inflation rates quickly and surely, and their predictions will then translate into how the family budgets their spending. Apparently one doesn’t need an Ivy League degree and a 5-figure Wall Street income to figure out that things cost more today than they did yesterday. Who would have thought such a thing?

Predictions about inflation are important because it tends to determine spending, saving and investment decisions for consumers and businesses. In a period of low to negative inflation savings accounts, bonds and long-term CDs are good investments, as return maintains the value of the dollars put away. In periods of rising inflation, extending credit and purchasing is a better bet, because the value of the dollars spent will continue to fall over time. Better to buy now and pay it back in yesterday’s dollars than save and have those dollars drop in worth.

Then, of course, there are those at the low end of the scale who simply do not have enough money coming in to save or invest, but who are merely trying hard to make the ends meet paycheck to paycheck. It is for those on a shoestring budget who suffer most in periods of rapid inflation. That they should be able to tell accurately that the money’s not going as far today as it did yesterday is no brilliant trick of statistical analysis. It’s just the way things are.

Duh.

Link:

Consumers Can Predict Inflation as Well as Professional Economists

The US Congress, both House and Senate, finally cleared the Housing and Economic Recovery Act of 2008 today, after nearly a year’s worth of hemming and hawing and slipping goodies into the legalese in the middle of the night. A regular miracle of modern political tug of war and a bill that’s changed its name and focus so many times nobody’s quite sure what’s in it other than a trillion or two to bail out Fannie Mae and Freddie Mac. Having weathered a total of seven [7] Senate cloture votes, President Bush is likely to sign it into law.

No one expects a handout from this bill unless they’re 1. a robber baron, or 2. a loan shark, or 3. a speculator and/or house-flipper (buys real estate only to flip it immediately at inflated price), or 4. an fossil fuels dealer. Thus not surprisingly, the stock market opened low this morning [7-28-08], down more than 134 points at noon. Though Fannie and Freddie were on the upswing on that promise of taxpayer trillions.

But there is up to a $300 billion set-aside aimed to offer 30-year fixed-rate mortgages with government backing to “at-risk” homeowners. But only if the mortgage holder goes ahead and shaves a full 10% off the current appraised value. This clause of the Act is scheduled to go into effect on October 1, and sunsets within a few years. These will be Fannie and Freddie loans with out-of-pocket fees.

If you’re barely keeping up with your mortgage or facing a ballooning rate, it’s a good idea to start now trying to understand this labyrinthine legislation and keep up with news reports on how it’s to be implemented. How housing rescue bill can help you is a good beginning from CNNMoney. What is so far known per the language of the bill:

• Qualified borrowers must live in their homes and have loans that were issued between January 2005 and June 2007. Additionally, they must be spending at least 31% of their gross monthly income on mortgage debt to be eligible.

• Home equity or line of credit on the property must be retired, and will not be available to FHA-backed mortgagees for five years.

Your current lender has to agree to all the terms – including the devaluation. Go ahead and scroll down to the What does it cost? header to see how FHA stands to gain from the arrangement. Why, you’d think this government agency was in it for profit or something! If you ever sell the house for more than loan principal, FHA gets a share of the profits (100% the first year). This should help keep the house-flipper privateers out of the program, though.

Here’s hoping the ‘housing rescue bill’ can actually help out some honest, hard-working people out here in the real world. If you think you’ll qualify, go ahead and contact your mortgage lender and start the discussion. You’ve got nothing to lose, right?

Some years ago while visiting my husband’s then newly widowed and elderly mother, we were moved to intervene on her behalf after some jerks claiming to be collectors for delinquent student loans went on a rampage of gross harassment against her because someone much younger had her same first and last name. They were calling her so often and being so verbally abusive that she changed her phone number, which she’d had for more than 20 years and which all her distant friends and relatives knew by heart. They were sending threatening letters – sometimes 3 a week – telling her they were going to ruin her credit and attach her wages.

After hubby calmly informed them they had the wrong person – do your homework, don’t call, stop writing and there were no wages to attach (she retired long ago) – Mother-in-Law got a call from her banker telling her they were now trying to attach her bank account! Hubby put a stop to that right quick by showing the many threatening extortion letters to that banker right there in his office, explaining the situation, and getting some good advice. Call the state Attorney General immediately, follow up with a formal letter detailing the illegal tactics, and if worst comes to worst, get a lawyer.

Now, I know it sounds weird that a woman who graduated from college in 1947 could be so thoroughly confused with the ~30-something single mother who was actually in arrears on her student loan payments, or that a sweet old lady could be so horribly abused by professional con artists/thugs. But the truth (as best we could figure) was that they figured they could brow-beat Mom into paying someone else’s debts just because she was old and living alone and had some money in the bank.

Luckily we had gone to high school with the AG and he was more than willing to go after these crooks wearing size 1000 pointy cowboy boots. The harassment ended in short order, and Mom now knows to simply let her contact with his debt/fraud task force know whenever she gets targeted in some scam. The shame is that there are so darned many scams out there targeting people like her, and once you get on one scammer’s list (even if they end up in jail), you’ll be sold to every other scammer in the con-club fleecing little old ladies out of their meager life’s savings.

So when I saw CNNMoney’s article entitled Debt collectors on the rampage, I figured it might be a good idea to document a bit about your rights if you happen to end up on the scam list. This article has a list of rights and procedures as well as a run-down on ways that third party collectors violate the rules. Those rules are detailed in the FDIC’s Fair Debt Collection Practices Act, and explained in some detail through the links at fair-debt-collection.com.

Even if you really do owe the debt, the collectors are required to abide by rules. For instance, they cannot call you before or after certain times of day, must stop calling if you tell them not to call, and may not demand any payments on debts for which your state’s statute of limitations has expired [a.k.a. "Zombie Debt"]. If you find yourself in a situation of unethical or illegal harassment the best thing you can do is educate yourself about this law and its provisions, and know what steps you can take to defend yourself.

If there’s anything unethical shysters are legitimately frightened of, it’s a mark (target) who knows his/her rights and isn’t reluctant to assert them.

Links:

Fair Debt Collection Practices Act
CNN: Debt collectors on the rampage
Debt collectors calling? Know your rights
Fair Debt Helpers [attorneys]

The cost of everything is still rising fast, despite the influx of ready cash to taxpayers in the way of rebates going to pay arrears on the mortgage or electric bill. The number of people losing their homes and losing their jobs continues to rise as well. And in a little-publicized indicator no one likes to talk much about these days, the number of Americans declaring bankruptcy is shooting through the roof – up nearly 30% [27.0] in the first quarter of 2008 over the same period in 2007. As Samuel J. Gerdano, Executive Director of the American Bankruptcy Institute says…

“Bankruptcies are rising due to the heavy burden of household debt and growing mortgage problems. We expect this trend to continue through 2008.

So there doesn’t look to be any break in the recession cloud this year, with indicators that it may well descend all the way into depression by election day in November.

I saw an interesting series over at the Popcrunch website entitled Famous People Who Lost It All, which really quite surprised me. The surprise wasn’t the famous people who had it all and died destitute, but the famous people who had it all, lost it all, then got it back. For instance…

I didn’t know that 5-time Academy Award winning producer Francis Ford Coppola had to declare bankruptcy in 1982 after the musical One From The Heart failed. At which point he borrowed money from his mother and went into the winery business and did just fine.

Nor did I know that Walt Disney declared bankruptcy in 1923 after his first company – the Laugh-O-Gram Corporation – went belly-up. So he moved to Hollywood, and the rest is history! Abraham Lincoln declared bankruptcy in 1833 when his business failed. He paid off his obligations and had a rather spectacular political career right up to the moment of his death. Political pamphleteer and revolutionary Thomas Paine came to America due to bankruptcy in England in 1774, and the ‘Great Master’ Rembrandt went bankrupt in 1656.

So it’s not all just heiresses, actors and rock stars that get rich, lose it all, and manage to do quite well for themselves! If you’re in a situation that bankruptcy might help alleviate (because the falling economy isn’t going to turn around), you might find the series at popcrunch heartening.

Links:
Consumer Bankruptcy: The Complete Guide
Bankruptcy Law – Consumer Bankruptcy Information
Major Consumer Bankruptcy Effects of the 2005 Reform Legislation [pdf]
Family Legal Guide: Bankruptcy [pdf]