[villalobos]

How can somebody making $87,000 a year be forced into declaring bankruptcy?

'Oscar Gray achieved the good life during 28 years of hard work at Delphi Corp. -- a six-figure income, a nice home in Holly and two vehicles.
But as Michigan's auto industry tanked in recent years, the forklift operator lost huge amounts of overtime pay and gradually sank into financial ruin. Saddled with $469,000 in debt, he declared bankruptcy last month.
Gray isn't alone. Once the symbol of blue-collar prosperity, Michigan autoworkers are going bankrupt in alarming numbers as vehicle production declines and overtime pay dwindles.
The United Auto Workers' legal department has handled the bankruptcies of nearly 10,000 of its members, retirees and their families in Michigan since 2002, according to Detroit News research of court records. UAW lawyers estimate that Chapter 7 and Chapter 13 filings in Michigan have been growing at a 10 percent annual clip in recent years.
The bankruptcies show that many Michigan autoworkers are failing to scale back their lifestyles in the face of massive changes slamming the state's bread-and-butter industry.
Gray didn't lose his job. His health isn't failing, and he is not going through a divorce -- the typical reasons many declare bankruptcy.
Gray has been losing overtime. His gross pay was cut $16,000 one year, sliding to $87,000, and may dip again because Delphi is considering a Chapter 11 filing.'

The emphasis is mine. This is absolutely ridiculous. Living in Mi is not that expensive either...

[Maflynn]

It doesn't take much,

I live in Mass where it is expensive so I can only talk to that.

I'm a programmer and my wife is a legal secretary, we pull down pretty good salaries. We don't live exhorbantly but yet we have little income after the mortgage and bills.

She's expecting and the really sad thing is we cannot afford have her stay home with the babies. So can it happen, it wouldn't take much of a push for us.

Some nice credit card debt, a 400k house, owning two cars and boom before you know it your in trouble if your salary is cut. Was he living beyond his means, probably not (but it sounds like he consideered his OT as regular salary).

Once we get used to a certain level of income our spending catches up and settles near that amount, so any cuts is going to be "troublesome".

Mie

[TETENAL]

http://www.pbs.org/wgbh/pages/frontl...s/credit/view/

Maybe this is the reason?

[SimeyTheLimey]

Originally Posted by villalobos

How can somebody making $87,000 a year be forced into declaring bankruptcy?

'Oscar Gray achieved the good life during 28 years of hard work at Delphi Corp. -- a six-figure income, a nice home in Holly and two vehicles.
But as Michigan's auto industry tanked in recent years, the forklift operator lost huge amounts of overtime pay and gradually sank into financial ruin. Saddled with $469,000 in debt, he declared bankruptcy last month.

* * *

Gray has been losing overtime. His gross pay was cut $16,000 one year, sliding to $87,000, and may dip again because Delphi is considering a Chapter 11 filing.'

The emphasis is mine. This is absolutely ridiculous. Living in Mi is not that expensive either...

Another question is how was it that a forklift operator was ever making $103,000 a year. That's absurd!

Given how grossly overpaid he was it is not surprising that the auto industry has been leaving places like Michigan and setting up instead in states like Alabama where labor costs are more rational.

[Railroader]

Michigan is a relatively cheap place to live compared to the rest of the nation.

A lot of fools have been living on overtime pay like it's going to always be there. When it dries up they struggle. I think personal bankruptcy such as you mentioned should be eliminated and people placed in debtors prisons. People need to learn personal responsibility.

Personally, I have structured my budget so that I can work a low paying job and still afford to pay my bills.

It's all about greed.

[villalobos]

Originally Posted by Maflynn

It doesn't take much,

I live in Mass where it is expensive so I can only talk to that.

I'm a programmer and my wife is a legal secretary, we pull down pretty good salaries. We don't live exhorbantly but yet we have little income after the mortgage and bills.

She's expecting and the really sad thing is we cannot afford have her stay home with the babies. So can it happen, it wouldn't take much of a push for us.

Some nice credit card debt, a 400k house, owning two cars and boom before you know it your in trouble if your salary is cut. Was he living beyond his means, probably not (but it sounds like he consideered his OT as regular salary).

Once we get used to a certain level of income our spending catches up and settles near that amount, so any cuts is going to be "troublesome".

Mie

Yeah but he is living in Holly, MI.... not in MA. Median house price there is $166,000. I am sorry, I understand he lost some of his salary, but he is still making $87,000!! According to the article that I forgot to link in my post, most of these bankruptcies occur with people who still have their job, and have no serious other issues. ironically people who DO lose their job avoid bankruptcies because they tend to cut their spending drastically... That is just crazy.


The article

[Railroader]

Originally Posted by SimeyTheLimey

Another question is how was it that a forklift operator was ever making $103,000 a year. That's absurd!

Given how grossly overpaid he was it is not surprising that the auto industry has been leaving places like Michigan and setting up instead in states like Alabama where labor costs are more rational.

He was probably working 12-16 hours per day and 7 days a week. A lot of guys I work with do this. I have very little respect for these guys.

I earn a little bit more than he does and I can assure you that his base salary is below $50,000

[villalobos]

Originally Posted by SimeyTheLimey

Another question is how was it that a forklift operator was ever making $103,000 a year. That's absurd!

Given how grossly overpaid he was it is not surprising that the auto industry has been leaving places like Michigan and setting up instead in states like Alabama where labor costs are more rational.

I actually wondered about that too.... $103,000 for a forklift operator....

[Athens]

Originally Posted by villalobos

Yeah but he is living in Holly, MI.... not in MA. Median house price there is $166,000. I am sorry, I understand he lost some of his salary, but he is still making $87,000!! According to the article that I forgot to link in my post, most of these bankruptcies occur with people who still have their job, and have no serious other issues. ironically people who DO lose their job avoid bankruptcies because they tend to cut their spending drastically... That is just crazy.


The article

87000 A Year minus taxes (34800 about if I read the tax rates right) that leaves him 52200 or about $4300.00 a month, that isnt alot for a family. Specially since things like Power, Cell Phones, Medical are really expensive.

[dcmacdaddy]

It all comes down to living within your means. Now he may have thought his means ($87,000/year salary) was sufficient to live the life he wanted, but apparently it wasn't. Which means he needs to change the life he leads so that he can live within his means.

I agree with Railroader about eliminating bankruptcies like this. This guy needs to suck it up and change the way he lives his life. Maybe he sells his big house and moves into something smaller, maybe he sells his new cars and buys something used. Maybe he spends the next five years living an extremely modest life until he gets his financial situation in order. Whatever he does, someone with a current salary of $87,000, and their only financial crisis is poor budgeting, should NOT be allowed to file for bankruptcy. That is just wrong.

[dcmacdaddy]

Oh yeah, cue Maury and his budget plans. Now HE has got a smart solution for this guy to pay off his debts and not have to declare bankruptcy. But my guess is this fork-lift operator doesn't want to sacrifice and is looking to get out from under his debts the easy way by declaring bankruptcy.

[bradoesch]

Originally Posted by TETENAL

http://www.pbs.org/wgbh/pages/frontl...s/credit/view/

Maybe this is the reason?

I've seen that. Very interesting.

[CRASH HARDDRIVE]

...$469,000 in debt,

That’s his main problem right there. The guy was living WAY beyond his means, borrowed well in excess of what he was earning, and took the bankruptcy route out- not to ‘survive’ but to preserve his lifestyle.

Pure and simple. There’s no call for hand-wringing and “Oh woe is the system, the US is doomed!” bullcrap over this. The guy simply realizes he can easily use the system to maintain his current level of ‘livin’ large’ and basically write off half a million dollars he owes others (thus improving his own income by that amount) and just ride out the resulting bad credit. (All-too easily done). Amazing anyone is falling for this, let alone hand-wringing for the guy over it.

Anyone earning $90-100,000 a year can damned well afford what they need, can afford to save and invest, and doesn’t need to borrow an additional half million in consumer CRAP on top of it, and then hang the balance on others after declaring bankruptcy.

I’d love to see the list of extravagances this guy is into in order to burn through his base income as well as borrowing half-a-mil beyond it. Anyone pleading poverty and ‘basic needs’ with those numbers is out of their minds, and demonstrating their own lack of financial sense.

This same bullcrap situation happens with people earning over a million+ dollars per year, or any level of income. If you’re a millionaire and you're borrowing multiples of millions beyond what you actually earn and therefore can pay back, you will be up the same $hit creek. It’s called having overly-expensive habits beyond your financial status. It exists at all financial levels. That’s how this happens.

[Spliffdaddy]

No, he wasn't living beyond his means. Not anymore than your average Joe making $45,000 and paying a $120,000 mortgage. He was living beyond his future means - like pretty much everyone else here.

Something like 85% of the folks making six-figure incomes are so deeply in debt that they cannot recover from a one-month interruption of that income.

I speak from experience. Call me a dumbass - and I'll agree with you. I *did* learn a lesson, however.

My situation was much like the man profiled in the article. I was married and we both were employed in union-represented jobs that provided an income which far exceeded the nature of the job. The overtime accounted for about half of our income - and the overtime was available non-stop for over 12 years. It was easy to take it for granted that it would never go away. Until it did. Our income dropped overnight from 180,000 down to 95,000. It hurt us the same way it would hurt anybody else to take a 50% drop in income.

Look around you. See all those nice fancy homes and nice fancy cars? Maybe 1 out of 10 is paid for. And that's being optimistic. All the truly wealthy folks I know aren't driving expensive new cars. All the broke mofos are.

Most of the people my age (39) are still paying off their tremendous college debt - while they live in houses they can barely afford. And drive cars that come with $600/month payments. I don't envy them. I feel sorry for them. Because I know what it feels like.

I'm glad I didn't borrow money to go to college. That should be outlawed. Rarely does it "pay off" in the long run. Damn near everybody I know has huge college debt and makes less money than I do.

Oh yeah... I made $70,000/yr operating a forklift in the mid-90's. I can see how somebody else could make 85,000+. Thank the labor unions for that. No wonder all the jobs are going overseas.

[Y3a]

the high wage paid by the auto manufacturers to a union guy is why the american cars aren't anything to sneeze about. We have union grocery store baggers in the DC area who make 35 bucks an hour on overtime.

[villalobos]

Originally Posted by Y3a

the high wage paid by the auto manufacturers to a union guy is why the american cars aren't anything to sneeze about. We have union grocery store baggers in the DC area who make 35 bucks an hour on overtime.

Yeah but try to live in the DC area with a $10 an hour job.... It is near impossible. This is a regional aberration. As long as there will not be a government effort (local or national) to require a given amount of lower housing to be built and rented out, there will be such aberrations.
Life in Holly MI on the other side is not that costly.

I think there should also be some oversight on the lenders who lend money to whoever wants some. They should share more of the risks if they decide to let people get deep in debts. The current guidelines for instance of maximum of 30% of a budget as payment for a mortgage are IMHO way too lenient, especially for lower income people. People who get deep in debts are mostly uneducated about financial responsibility, sometimes stupid if they do it repeatedly, but lenders who let that happen are not beyond reproach either.

[Doofy]

$87k a year for a forklift driver? That's ridiculous!
They're on about $30k - $35k here.

[Railroader]

Originally Posted by dcmacdaddy

It all comes down to living within your means. Now he may have thought his means ($87,000/year salary) was sufficient to live the life he wanted, but apparently it wasn't. Which means he needs to change the life he leads so that he can live within his means.

I agree with Railroader about eliminating bankruptcies like this. This guy needs to suck it up and change the way he lives his life. Maybe he sells his big house and moves into something smaller, maybe he sells his new cars and buys something used. Maybe he spends the next five years living an extremely modest life until he gets his financial situation in order. Whatever he does, someone with a current salary of $87,000, and their only financial crisis is poor budgeting, should NOT be allowed to file for bankruptcy. That is just wrong.

Quoted and bolded for emphasis.

Originally Posted by dcmacdaddy

But my guess is this fork-lift operator doesn't want to sacrifice and is looking to get out from under his debts the easy way by declaring bankruptcy.

DING DING DING!!! We have a winnar! Hopefully this kind of debt avoidance can be eliminated. Our society will be better off if people can learn to live up to their responsibilities.

[Railroader]

Originally Posted by Doofy

$87k a year for a forklift driver? That's ridiculous!
They're on about $30k - $35k here.

Most make less than that here. I'll agree his base salary of even $50k/year is a bit high for the location he lives in. It is an issue I disagree with the union on that all laborers make the exact same wage across the board no matter what their jobs are. There's no reason a guy who drive a fork lift should make the same as a machine operator/technician who runs a few machines making parts does. The pay scale should reflect job importance/skill. But the union wants everyone to make the same as the highest paid guy. Only Skilled Trades makes more as a union member. I think that's wrong.

It's disheartening that the same as the guy who installs the engine in cars makes the same salary as the guy who empties trash cans.