Apple Pie, Fireworks, and the Financial Squeeze

It's that patriotic time of the year when we celebrate our shared bond as American residents. It's the season for community celebrations, parades, and ice cream socials. Attending such events gives us a common experience, a shared reference point for what it means to live in America. Apparently, struggling to pay your bills is also part and parcel of being an American. An April survey showed that 52% of households had taken money out of savings, retirement accounts or investments in the last year to pay for necessary living expenses. The number is up from 43% when an earlier survey was conducted in October. 

Other evidence shows that Americans have low confidence in their financial prospects. The Pew Research Center found that for the first time in a half-century of polling, more than half of Americans feel they either haven't moved forward or have fallen backwards in the last five years. The number of those who say they are better off has dropped to a record-low of 41%--and that was in back in late January/early February before the collapse of Bear Stearns, gasoline prices at $4 per gallon, and another preciptious drop in the stock market. Nearly 8 in 10 Americans (79%) say that it is harder for people in the middle class to maintain their standard of living. Such pessissim won't stop the fireworks on the 4th of July but financial pressure is an increasingly common part of middle-class life experience. 

Comments

[Patches]

In our Chapter 13s what is and will be happening is that the amounts we had allocated for upkeep and gas on vehicles is now way too low. Even if the budget was padded a bit by the IRS “allowable” expenses for other things like food, entertainment, contingency, etc… are being eaten up by food, gas, etc. (take your pick). Wages may have increased a bit but it is still not even keeping pace with what the debtors are spending nowadays. So long story short, our low percentage plans have no room to wiggle. I think, if something doesn’t change, our previously “feasible” plans will no longer be feasible for the debtors. We may start to see more conversions and or dismissals of chapter 13s. Right now we are having trouble converting the cases if the debtors are over the median and if we do, the debtors will possibly lose things like homes and cars. Can we change the budget mid-stream to pay less to unsecured creditors or possibly convert them to a 7 based on factors happening today? Maybe we would have a chance in our 02, 03 and 04 BKs(old law cases) but most likely not in the 05s(new law cases). Even if we just went with the 05s, we can see a huge up-swing in expenses, it’s even worse for our earlier 13 filings. I think our 13 debtors have that “pessimistic” attitude you were talking about, mainly because they are more susceptible to inflation generally than most.

As for the 4th of July celebrations…. it was awesome! BBQ, fireworks, friends and family! My wife was born on the 4th of July, so I had a talk with the Mayor and City Counsel and got them to have a big celebration downtown, fireworks and everything! Just for my wife. (j/k) of course!

[Erik]

interesting post and stats.

I think there is probably a fundamental economic truth underlying this "apprehension" that should be addressed: Americans will have to decrease their level of indebtedness and increase their overall rate of savings. This adjustment has loomed like the sword of Damocles over the American economy, and has accelerated with the sub-prime cum credit crisis that initially infected financial markets and has now spread to the real economy. It seems that “financial pressure” has always been a common element of the middle class (at least lower middle class) experience. With global imbalances gradually unwinding, it is likely to be more common for everyone.

[Jay Wiedwald]

Actually, I'm surprised that 52% of Americans have (had?) savings, retirement accounts or investments.

Many of the people that I know are living month-to-month "life style."

[Patches]

Thats what I'm seeing also. If they do, they work for the city, county, refinery or a government contractor.

[Marcia]

I am being faultly accused of writing a check to sear store in MO. Which was last year. I live in Maryland never been to MO. Check collection agency I contact them last year.The woman spells her name,,Marsha and her S.S. is on the check..Told them of my first 3 number. They told me sorry the wrong one. They sent me 3 letters last year. A month ago they sent me another letter stating the bill was not payed yet..Holding me accountable for it.To Sears in MO. she wrote it out for $977.50 and stopped payment on it a week less. They think its me. I went to State police,MD sheriff dept. Sears here. I went to bank of america where the bank she was with. collection sent me a copy of check.Had her name and another person on account. Their S.S. for both on it phone numberand address.District Attorney told me every time I get a letter from now on Return to sender and tell them to call him. I put his imformation on envelope..But they sent it right back to me got it today..Now what?

[Marcia]

Anyone got any legal imformation please let me know. Sear store here in salisbury,MD would not send my imforation or fax a letter to main Sears Head Quarters at all.Why? Because it was not at their store. Same goes for Bank of America..it was not from their branch.It was in MO. not here.I showed Bank President he said ,nothing they can do it was not from their bank. So I went to Sheriff and State of MD. Police dept. and Attorney General.How much more can I do. District Attorney told me to not open mail from them and return to sender..I should not have to prove its not me. becuase I never commited a crime.