Many of us need money to survive, for basics like food and shelter. The system is set up to attack us. It is up to us to learn how to counter the system's financial attacks. All bets are off when the financial system collapses. Until then, we need to survive the financial system. If we can live our lives without owing debt to the system, that's great. If we can't, we have protections.
At the emergency level, the best protection we have is Chapter 7 bankruptcy. This bankruptcy allows us to keep thousands of dollars or even tens of thousands of dollars of property. We practically keep all our retirement account money like 401Ks or IRAs in all states. So this bankruptcy is really a great financial protection for us. The banksters hate to lose any money we might legally owe them, so they create fear and social disapproval against bankruptcy. But our right to bankruptcy is in the Constitution, and it is our ace in the hole protecting our ability to live. We have more than one ace in the hole too, as the ability to use bankruptcy is available to us again after some years pass.
Beyond the emergency level, there are other counters to the system's attacks so that we can tread water and not get sucked down the drain. Housing costs are one of the biggest costs for us, and hence one of the biggest attacks on us. The financially wealth usually make their money through capital gains or owning a business, not by working for someone else for a salary. We can take a page of out the playbook of the wealthy, and buy a home to live in instead of paying rent. We don't need 20% down payment to buy a home. There are 0% down payment mortgage programs available for us as long as we are making money from a job. At least one of these mortgage programs allows us to have bad credit or no credit, so that we could possibly buy a home just after finishing with bankruptcy. If housing prices rise, then we have capital gains, like the financially wealthy. This could be hundreds of thousands of dollars in tax free capital gains. If housing price fall, there are protections for us.
What protections do we have if we cannot afford our mortgage payments? An obvious protection is not paying the mortgage anymore and instead saving the money that would have gone to the mortgage. That doesn't sound like much of a protection, and sometimes it is not. Sometimes it is a big protection, because we can't get kicked out of our homes overnight. It takes several months of not paying our mortgage before the banksters even start the foreclosure process. For example, one of the biggest investors that owns mortgages is Fannie Mae, and banksters have to wait 121 days before starting the foreclosure process for a Fannie mortgage. Then, the foreclosure process take months at a minimum, and even up to several years. Then, the banksters have to go through the eviction process after foreclosure. So while the months or years go by that we are not paying our mortgage, we are saving our money so that we have ability to move on with our lives when the banksters finally evict us after foreclosure.
What if we want to do more than saving the money that we otherwise would have paid for the mortgage? We can request a loan modification, but the banksters are not legally compelled to agree to a loan modification. However, after the banksters victimized millions of homeowners after the housing bubble burst, many of them either made internal policy changes or agreed to legal settlements. The banksters have a system so that we can look up the investor that owns our mortgage and the servicer of our mortgage. The servicer is basically the middleman between us and the investor that owns our mortgage. For example, we send our mortgage payments to the servicer. We would also make a loan modification request to the servicer. The investor tells the servicer what kind of loan modifications can be made on the mortgage. For example, big investor Fannie Mae has a standard loan modification policy to extend our mortgage to practically 40 years from today. Many bankster servicers agreed to legal settlements so that they would be forced to pause the foreclosure process while they consider our loan modification request. For these banksters, even if they denied our loan modification request, we gained more months of saving money as the foreclosure process was delayed during their consideration of the loan modification.
Another way the system is set up to attack us in a big way is student loans. We should never take out private student loans or parental federal student loans. Student loans practically cannot be eliminated with bankruptcy. Federal student loans owed by student borrowers are relatively survivable because their monthly payments can be our based on our income. As a result, the monthly payment can be as low as $0, and these loans are forgiven after 25 years of being in income based repayment plans. Private student loans are very dangerous because they cannot be forced into an income based repayment plan or forced to be forgiven. The only protection against private student loans is the statute of limitations. After the number of years in the statute of limitations passes without us making a payment or promising to pay, the private student loan is not enforceable in court. But we would still be vulnerable if the private student loan owner sued us in court before the statute of limitations expired, so again we should never use private student loans. Parental federal student loans are even more dangerous because they have no statute of limitations, have no income based repayment plan, and practically have no forgiveness.
Our credit reports and credit scores will take a hit when we go through bankruptcy, stop paying our mortgage, stop paying our student loans, or stop paying other bills like credit cards and medical bills. Our survival and our ability to have the basics like food and shelter are more important than our credit. In an emergency, we can use bankruptcy to wipe out all unsecured debt like credit cards and medical bills. The day we finish with bankruptcy, some banks or credit unions will approve us for unsecured credit cards or car loans, and many will after a year or two. Our credit can bounce up in a year or two.
None of this is meant for us to go on a spending spree with no intention of paying back. That would be fraud and could prevent us from using bankruptcy and could even send us to prison.
If we are going to leave any money in the system, one of the best options is a Roth IRA. We could have a million dollars in a Roth IRA and keep it all through a bankruptcy. We can withdraw whatever money we put into a Roth IRA at anytime without any tax penalty. The money in a Roth IRA doesn't have to be invested in anything because it could sit in an FDIC insured account within the IRA.
Fannie Mae standard loan modification policy
_ https://www.fanniemae.com/content/guide/servicing/d2/3.2/05.html
Fannie Mae 121 day timeline to refer a mortgage to the foreclosure process
_ https://www.fanniemae.com/content/guide/servicing/e/1.2/02.html
MERS look up the investor and servicer of a mortgage
_ https://www.mers-servicerid.org
Federal student loans owed by student borrowers
_ https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven
At the emergency level, the best protection we have is Chapter 7 bankruptcy. This bankruptcy allows us to keep thousands of dollars or even tens of thousands of dollars of property. We practically keep all our retirement account money like 401Ks or IRAs in all states. So this bankruptcy is really a great financial protection for us. The banksters hate to lose any money we might legally owe them, so they create fear and social disapproval against bankruptcy. But our right to bankruptcy is in the Constitution, and it is our ace in the hole protecting our ability to live. We have more than one ace in the hole too, as the ability to use bankruptcy is available to us again after some years pass.
Beyond the emergency level, there are other counters to the system's attacks so that we can tread water and not get sucked down the drain. Housing costs are one of the biggest costs for us, and hence one of the biggest attacks on us. The financially wealth usually make their money through capital gains or owning a business, not by working for someone else for a salary. We can take a page of out the playbook of the wealthy, and buy a home to live in instead of paying rent. We don't need 20% down payment to buy a home. There are 0% down payment mortgage programs available for us as long as we are making money from a job. At least one of these mortgage programs allows us to have bad credit or no credit, so that we could possibly buy a home just after finishing with bankruptcy. If housing prices rise, then we have capital gains, like the financially wealthy. This could be hundreds of thousands of dollars in tax free capital gains. If housing price fall, there are protections for us.
What protections do we have if we cannot afford our mortgage payments? An obvious protection is not paying the mortgage anymore and instead saving the money that would have gone to the mortgage. That doesn't sound like much of a protection, and sometimes it is not. Sometimes it is a big protection, because we can't get kicked out of our homes overnight. It takes several months of not paying our mortgage before the banksters even start the foreclosure process. For example, one of the biggest investors that owns mortgages is Fannie Mae, and banksters have to wait 121 days before starting the foreclosure process for a Fannie mortgage. Then, the foreclosure process take months at a minimum, and even up to several years. Then, the banksters have to go through the eviction process after foreclosure. So while the months or years go by that we are not paying our mortgage, we are saving our money so that we have ability to move on with our lives when the banksters finally evict us after foreclosure.
What if we want to do more than saving the money that we otherwise would have paid for the mortgage? We can request a loan modification, but the banksters are not legally compelled to agree to a loan modification. However, after the banksters victimized millions of homeowners after the housing bubble burst, many of them either made internal policy changes or agreed to legal settlements. The banksters have a system so that we can look up the investor that owns our mortgage and the servicer of our mortgage. The servicer is basically the middleman between us and the investor that owns our mortgage. For example, we send our mortgage payments to the servicer. We would also make a loan modification request to the servicer. The investor tells the servicer what kind of loan modifications can be made on the mortgage. For example, big investor Fannie Mae has a standard loan modification policy to extend our mortgage to practically 40 years from today. Many bankster servicers agreed to legal settlements so that they would be forced to pause the foreclosure process while they consider our loan modification request. For these banksters, even if they denied our loan modification request, we gained more months of saving money as the foreclosure process was delayed during their consideration of the loan modification.
Another way the system is set up to attack us in a big way is student loans. We should never take out private student loans or parental federal student loans. Student loans practically cannot be eliminated with bankruptcy. Federal student loans owed by student borrowers are relatively survivable because their monthly payments can be our based on our income. As a result, the monthly payment can be as low as $0, and these loans are forgiven after 25 years of being in income based repayment plans. Private student loans are very dangerous because they cannot be forced into an income based repayment plan or forced to be forgiven. The only protection against private student loans is the statute of limitations. After the number of years in the statute of limitations passes without us making a payment or promising to pay, the private student loan is not enforceable in court. But we would still be vulnerable if the private student loan owner sued us in court before the statute of limitations expired, so again we should never use private student loans. Parental federal student loans are even more dangerous because they have no statute of limitations, have no income based repayment plan, and practically have no forgiveness.
Our credit reports and credit scores will take a hit when we go through bankruptcy, stop paying our mortgage, stop paying our student loans, or stop paying other bills like credit cards and medical bills. Our survival and our ability to have the basics like food and shelter are more important than our credit. In an emergency, we can use bankruptcy to wipe out all unsecured debt like credit cards and medical bills. The day we finish with bankruptcy, some banks or credit unions will approve us for unsecured credit cards or car loans, and many will after a year or two. Our credit can bounce up in a year or two.
None of this is meant for us to go on a spending spree with no intention of paying back. That would be fraud and could prevent us from using bankruptcy and could even send us to prison.
If we are going to leave any money in the system, one of the best options is a Roth IRA. We could have a million dollars in a Roth IRA and keep it all through a bankruptcy. We can withdraw whatever money we put into a Roth IRA at anytime without any tax penalty. The money in a Roth IRA doesn't have to be invested in anything because it could sit in an FDIC insured account within the IRA.
Fannie Mae standard loan modification policy
_ https://www.fanniemae.com/content/guide/servicing/d2/3.2/05.html
Fannie Mae 121 day timeline to refer a mortgage to the foreclosure process
_ https://www.fanniemae.com/content/guide/servicing/e/1.2/02.html
MERS look up the investor and servicer of a mortgage
_ https://www.mers-servicerid.org
Federal student loans owed by student borrowers
_ https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven
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