The Mortgage Forgiveness Debt Relief Act expires tomorrow
My younger brother, who has always been the most irresponsible in the family and least respected, took advantage of the real estate bubble and the loose government debt laws. When prices were rising he was buying all kinds of off road vehicles to support his outdoor hobbies and to give him a false sense of status. He would drive by my house to show off his latest high end 4 wheel drive SUV or shiny large CC motor bike and I would just look on in amazement knowing that he did not make enough money to buy this stuff. If it had been me I would have been driving a Corolla.
Back in 1999 he bought a home in Riverside for $110k and kept borrowing on it until he owed $250k. He then walked away from the home last year. He also claimed bankruptcy and wiped out all his credit card debt which was sizable yet he claims that he has a $40k stash. This is the second time he has wiped out his credit card debt in this way. He seems to know all the tricks to get credit collectors off his back by forcing the people who want to collect from him to jump through paperwork hoops until they give up.
He is an electrician and now helps to install solar farms in the dessert. Since these are remote locations they have to pay people a living allowance to get them to locate there as most have a home and family elsewhere. Him and his wife located to the small town close by where rent is cheap and he gets enough for food and rent so all of his union wage of $90k a year can pretty much be used as disposable income.
I'm sure that in another 7 years he will start the entire cycle over again. After all, he is good at it and the laws are set up so that it is easy to do. This is not that uncommon as many people live this way. And I'm sure he doesn't plan for all this ahead of time. What he does is live a life style he cannot afford because the laws allow him to and then when he gets himself into a situation he uses his craftiness to figure a way out. It's not like it was premeditated. He is just too irresponsible to admit to himself that he is on a path that is leading to where it is. Basically he rationalizes what he is doing until the #$%$ hits the fan and then he looks for anyway possible to get out free and clear. I don't blame him. I blame the people that created the laws that allows irresponsible people to never get to a day of reckoning that would teach them that there is no free lunch. But there is a free lunch so this lesson is never learned. So they keep doing it over and over because they are never forced to learn not to.
My brother owes me over $10k and the last time I loaned him money I told him that I was not kidding myself into thinking that I was going to get paid back because I knew I wasn't. I told him that what I am doing is giving him the last handout that he will ever get from me and that he could be dying on his death bed for lack of money to save his life and that he could forget coming to me for it because I was through with is irresponsible behavior. I told him that if he paid back everything he owed me that I would reconsider. He never paid me a dime and after that he never asked again.
To show you how out of it he is he votes Republican when it's the Democrats that have created the laws that allow him to work the system. I often ask him why he votes Republican when he needs the Democrats to enable him to live the way he does. He states the typical ideological lines but I say to him that he doesn't live the life, that he is a Democrat, why not just vote what he is. He's just pretending to be a Republican.
That sounds just like my brother.He's had 2 houses foreclosed on in less than 10 years.He owed my dad 60 grand when he passed.He came to him again before he passed and dad loaned another grand.He told my brother if didn't pay it back,don't ever come back.He never paid it back.He has to live with it.He has to live beyond his means.He's what I call an educated idiot.My dad would say my brother was nice,he would give you the shirt off his back and your back and your back.
But your father went to his death bed unreconciled with his own son. Sorry, the larger onus of debt here, IMO, lies with your dad, while living. I'm sure there are more details and your brother might be a louse, which, IMO, is beside the fact. Your dad should have(and maybe he did) allowed an avenue of reconciliation with your brother that bridged compulsive(perhaps) sponging. Most of us have at least one "taker" in our families....;-)
It all comes home to roost at some point in time... most likely, late in life.
Generally most people make decisions from a "monthly payment" perspective. I've been focused on a "net worth" perspective instead. This led the wife and I to refinance our home from a 30 year to a 15 year, increasing our payment (gasp!) to take advantage of a nice 2.5% rate.
In 15 years my decision will shine. In 15 years others will be wondering how they got into such a mess on the eve of retirement. Remember: SSecurity is supposed to be about 1/6th of what the gov't estimates you'll need to have a reliable retirement. The other 5/6ths are on you.
In 2007 I made a lucky bet on three solar panel companies and tripled my investment in less than a year and then sold. I used the after tax profits to pay off my home mortgage. Now I save money I used to pay the monthly payment on my 15 year loan. However, you can make all the right decisions, save all your life, and retire at age 65 and you will never have as much income in retirement as a government employee who retires at age 55 even though they made a lot less than you yet you will be paying for that government employees inflation protected pension throughout your retirement. This seems to be someone's concept of fairness by what logic I cannot fathom. Certainly it seems fair to the government employee but what about the rest of us who get stuck with the burden of giving them the dream retirement while we stand around and watch them enjoy spending our money. If you ask me I think it is time that we siege the Bastille and start taking heads. Personally I don't feel like eating cake.