People often imagine Small Claims courts as places where neighbors settle disputes about fences, kitchen renovation jobs, etc. This imaginary court is in the middle of Townsville, USA. Norman Rockwell presides, and you stop at the local diner after your case is resolved. But that view is often extremely inaccurate. Instead, as much as 85 percent of cases in many courts now consist of private companies suing to collect on consumer debts. The suing companies are often nationwide debt buyers, who pick up defaulted loans for pennies on the dollar. The companies expect that the defendants won’t show up for…

As rising costs continue to strain family finances, many Americans take out short-term loans to pay for routine expenses. These short term loans are marketed as Buy Now, Pay Later (BNPL). More and more Americans are going into debt for groceries, when their rent is due, at the doctor or the vet’s office, or when the time comes to pay the electric bill. However: when borrowers miss a payment, they may be hit with enormous penalties and fees. Some lenders charge fees as high as 25 percent of the missed payment — turning a product marketed as “free” into a…

MOVIE SCORES….  1. Cavatina….score of The Deer Hunter  I remember sitting in the back row of a small movie house at the end of Deer Hunter, and crying my eyes out at this piece. It somehow evokes all the aspirations of each main character in the movie – and the terrible disappointments for each and every one of them. There were so many tragedies in the late 1960’s and 1970’s, we forget them so easily. 2. The Big Combo, title sequence by David Raskin For me this is a marvelous, unknown musical achievement…incredibly evocative. 3. Godfather theme, orchestral suite I…

Let’s say that a health policy is advertised as follows:  Fast forward — you have a serious illness, and wind up with a $40,000 hospital bill. You pay the first $7,000, which is your deductible…. then you pay coinsurance –   20% of the remaining $33,000, or $6,600….. finally, the insurer pays the remainder, which in this case is just $26,400. I call this a $13,600 effective deductible for hospital stays.   The insurance company is doing fine….after all, they only had to pay out $26,400 on a $40,000 claim. The insured has paid $13,600 – and remember, that’s after forking…

RIP Medical Debt has become prominent in the fight against health care debt burdens. Once the funders purchase these debts, their next step is always to cancel them. This should be a blessed event for the families who are currently in debt. However —   are these efforts delivering on their promise? Not completely, according to the largest study to date of medical debt relief programs.   Neale Mahoney at Stanford could find no evidence that buying and then forgiving medical debts improved the average beneficiaries’ finances, access to credit, or their physical or mental health.  The beneficiaries were even less likely to…

Student loan debtors are very nervous about their new higher loan payments. If they cannot get “income-based repayment” — for whatever reason– the new payments may be economically back-breaking. I have had borrowers ask me if they could declare bankruptcy. Until a couple of years ago, my answer was that they would probably fail. In many cases, the Government would actually send in its own attorneys right away to challenge you. However, there has been a small improvement.  Courts are now open to consider three situations that could produce a successful student loan bankruptcy. This is called the Brunner test….and …

The issue of student loan forgiveness is really the province of the Democratic Party. An astonishing percentage of Republicans (at least astonishing to me) take the attitude of “You made your bed, now lie in it.” Republicans argue that taxpayers would bear the cost of defaults on federal loans. They also argue that it is unfair to those who have already struggled to repay their loans. The “burden on taxpayers” is their weakest point, given the stupendous deficit spending of both Trump administrations. If $50 billion or even $150 billion of student debt goes unpaid, this is small potatoes in the overall Republican…

This new book looks like a great one ……. Debt’s Grip: Risk and Consumer Bankruptcy by Pamela Foohey, Robert M. Lawless, and Deborah Thorne Debt’s Grip uses eleven years of court records and surveys to describe what it means to live in financial precarity in the United States. Bankruptcy filers describe the privations and struggles they suffered. It documents the increasingly lengthy period of time people sit in the financial “sweatbox” before filing bankruptcy.  Several chapters are built around types of debts– home and car debts, medical debts, and credit card and other unsecured debts. An additional chapter discusses how the bankruptcy system both…

Chris Hedges – a former minister and foreign correspondent — has described himself as a socialist and  anarchist. His interviews and blog posts are always stimulating.  He points out: “Workers who are unable to meet their debts are far more likely to remain submissive and compliant. Debt peonage has always been a form of political control: 1. Native Americans, who  were forced by the U.S. government onto tribal agencies, were required to buy their goods on credit at the agency stores.  2. Coal miners in southern West Virginia and Kentucky were paid in scrip by the coal companies — and kept in perpetual…

Chrystin Ondersma is a law professor at Rutgers Law School, and an internationally recognized expert in bankruptcy and household debt.  Here are some highlights from her latest book,  Dignity Not Debt. “Anyone who has debt and feels ashamed and alone must understand that it’s not their fault—our whole system is designed to force you to rely on debt, even when it’s obvious you won’t be able to repay it.”  .”The most striking thing in  my debt research is the degree to which Black Americans have been excluded from the opportunity to build wealth in this country.   Black households are much less…

Marshall Allen, a ProPublica investigative reporter who fought for the rights of patients facing unfair medical bills, died last May at age 52 from a heart attack. Allen approached his stories with the moral conviction that doctors, hospitals, drugmakers  and insurers could be  more transparent and humane.  He first showed how a hospital system refused to cover the care of an employee’s premature baby, leaving her with a bill for $898,984.57.  Within days of Allen calling the system’s media representative, the hospital promised to cover the bill. “He would be our tour guide to things that were incredibly enraging,” said Tracy…