Tag Archives: bankruptcy

What Happened to Be Prepared with the Scouts?

New Orleans       Trying to clean up the attic meant buying contractor bags.  Building out the attic had been a construction project over years that I had finally finished in time for my son to make this his room for some years until he left home.  He never quite got all of his stuff out and that was added to all of the valuable junk that heads for an attic because none of us can bear to make a decision about what should really happen to the old jacket, the broken chair, the this and that.

Out of ten bags going to Goodwill and Bridge House, I salvaged a bathing suit and a belt, he might still want.  I also kept a hooded sweatshirt he had abandoned that still might fit me that was emblazoned with Troop 150 Boy Scouts of America that he had taken to scores of camping trips during the year and what they called “super-trips” in the summer.  We matched the money he was required to raise, and he went to trips in Colorado, on the train to Chicago and then Montana, and the Tennessee Smokey Mountains.  His stints as quartermaster for his troop still make him the chief supply and storage man when we’re in the trailer in Wyoming or on any family trips.

I saw pictures of my brother and me as scouts all forty times I did Q&A’s for “The Organizer” last year.  Camping and the skills I learned in the scouts have stayed with me for a lifetime.  Being Eagle Scouts meant something to me, my son, and my brother.

Where in the Boy Scout handbook would I find filing for bankruptcy as the way to handle responsibilities for abuse of some boys by their scoutmasters or adult leaders?  Is that trustworthy?  Where in the pledge would I find the Boy Scouts in the middle of the culture wars, dithering rather than unable to be honest with their sponsors about not discriminating against boys of any shape, size or orientation?  You see where I’m going with this?

The Scouts are losing members like so many other institutions that might have seemed ageless in the past whether unions or the churches or other “clubs” like 4-H and Rotary.  Their membership has dropped 12% from 2012 to 2017, but they still have 2.3 million members, which is nothing shabby.  With some controversy and current litigation, they picked up 70,000 girls when they opened their doors to women, which, frankly, I thought was a good thing, especially in these days and times when it is ever more important to build – and improve – the character of young men.

The Wall Street Journal reports the Scouts claim assets of $1.5 billion with over $800 million in stocks, bonds, and other investments along with almost $500 million in land and buildings including the incomparable Philmont Scout Ranch in New Mexico.  They have some financial issues certainly, that might teach them some lessons for the future.

What happened to “be prepared.”  If they have some liabilities coming, they have the money it would seem to handle them fairly.  If they have some problems with the Girl Scouts, maybe they should start talking about a merger rather than a competition.

These are new days, but old values have meanings as well.  If the Scouts are going to continue to be relevant and occupy a special place in the future like they do for some of our memories of the past, then the Scouts should consult the oath first, and the lawyers last.

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Supreme Court Sinks More Homeowners into Permanent Debt

dead_economy-300x199New Orleans    In a startling unanimous decision, the US Supreme Court overturned an 11th Circuit Court of Appeals decision finding in favor of Bank of America that even bankruptcy protection does not allow underwater homeowners the ability to escape the obligations of second mortgages.  The impact of the decision allows zombie banks to continue operating on the basis of balance sheets reflecting virtually lifeless real estate holdings and makes these beleaguered homeowners into walking dead debtors with virtually no hope of a second chance.The Supreme Court once again reminds Americans that the Constitution is fundamentally about property rights and that the sanctity of a contract trumps all vestiges of common sense.

Generally speaking, a home is commonly classified as “underwater” if the value of the outstanding mortgage is 25% higher than the current market value of the home.  Remember the mortgage we are talking about here is the first mortgage.  The second mortgage is satisfied after the first is fulfilled.  Many of these second mortgages are home improvement loans.  Others arose from the need to finance children’s education or medical emergencies by attaching what has historically been the primary asset creating citizen wealth for the vast majority of low and moderate income families in the country.   Bank of America in their court filings estimated that there were 2.1 million underwater homeowners with second mortgages at the end of 2014.   Others like Zillow estimated that there are still 8 million homeowners who are underwater and most real estate experts estimate that it is likely that half of them have some kind of “second” on their homes.  This is not an insignificant problem in either the economic recovery or the hope for narrowing the equity gap.

Of course not all of these families had declared bankruptcy, partially because banks and others have done an amazing job over recent years with Congress in making bankruptcy both harder to achieve for desperate families and less valuable as a chance for a clean slate and a second chance.  Filing for bankruptcy does not allow someone to wipe out a mortgage debt or a student loan debt for example.  The mortgage obligation is what forces an underwater homeowner into foreclosure.  The best hope for the debtor is that surrendering what used to be an asset to the bank, calls quits to that debt.  In 2007 and 2008 when ACORN was negotiating with big banks and mortgage loan servicers as the implosion began, I was at some of those meetings.Executives then believed that they would just have to wipe out their second mortgage portfolios as worthless.

The Supreme Court’s decisions says, “no way, you’re stuck.”Hey, some day in the by and by, real estate values may go back up, allowing the loan to be collected.  Some of these properties are so far underwater that it won’t be a year but a generation for that to happen.  For the banks paying a dollar on that loan every 90 days allows them to still call it a performing loan, helping their zombie balance sheets, and leaving the debtor, desperate for a clean start, carrying even more weight. The Justices say, “dude, it’s a contract, didn’t you get that?”  The debtors, like millions of others, were on the merry-go-round being pushed by these same bankers and promoters in the real estate bubble into these sucker bets.  These weren’t contracts as much as cons.

Only death relieves some of these debts.It’s already legal for 25% of someone’s social security to be attached.  Now the Supreme Court has just locked another ball and chain onto untold numbers of families with little hope for the future but dragging the weight behind them, sentenced to a life as walking dead, not in debtors’ prison, but in a permanent debtors’ probation of sorts with little or no chance of escape.

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Johnny Cash – Folsom Prison Blues (Live)

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