October 23rd, 2006   11:07 am

To BK or not to BK… Moral Issues of Bankruptcy

Bankruptcy I found this in the office of one of the bankruptcy attorneys I visited…

With almost $140K in unsecured debt (which is part of my total 2.2M of debt), I am now facing the question: to go through bankruptcy or not?

Lots of you have suggested that I just go ahead and BK and start fresh. Many of the most successful entrepreneurs have gone through bankruptcy at one point in their career… right?

Ideally I want to repay all my debts. But I am not sure how I can get that done quickly. The amount is just too large and the emotional pressure is getting to me.

The problem:

My minimum payments on my unsecured debt are almost $4,000 per month. The mortgages and utilities on 5 houses are $10,000 - $15,000 per month. I am 2 months behind on the credit cards / credit lines and 4 months behind on the mortgages. So it will take $50-100K just to catchup!

I looked at the standard debt reduction techniques (”debt snowball”, etc) and they don’t seem to apply for my case. If I was to put my tech skills to use and go back to a programming job (4-5K/mo), I would simply not have the ability to float even my minimum payments.

I have also been looking for creative ways to catchup/repay my debts via wholesaling and selling my houses via a seller financing, etc). Thank you for all your feedback too. I received many good ideas from my readers. Look through the comments and you’ll see.

The creative ideas are not bad… I’m sure some of them will work… but they take time to develop and implement. To float my debt, I need quick cash now. Wholesaling / bird-dogging for other investors for 5-10K assignment fees is a good idea. I will be working with my Rich Dad to really learn how to do it right. However, that too will take a while before it gets off the ground.

In the mean time the lenders keep bugging me me with multiple phone calls per day, and lots of angry letters. The past due balances keep rising. My credit score is going down the drain. And the pressure of all this debt has been very overwhelming.

Moral Issues of Bankruptcy…

One one hand it feels like “weaseling” out of my responsibilities. On the other hand, if I take the bankruptcy route and wipe off my debts, I can focus on rebuilding my real estate business and moving forward.

Since I want to do the right thing and please my Maker, I am giving the moral issues extra consideration.

Dave Ramsey in The Truth About Bankruptcy says:

Myth: I’ll just file bankruptcy and start over; it seems so easy.
Truth: Bankruptcy is a gut-wrenching, life-changing event that causes lifelong damage.

The Christian Science Monitor in The Moral Burden of Bankruptcy compares the two views from a biblical perspective:

To make this case, bankruptcy’s critics often cite Psalm 37:21: “The wicked borrow and do not repay, but the righteous give generously.” From sources such as Crown Financial Ministries and Dave Ramsey’s nationally syndicated radio show, advice seekers hear they have a duty in most cases to keep their payback promises even when life throws them a curve ball.

But another school of thought sees a more complex picture in which lenders also face admonitions to forgive debts. For instance, Jonathan Alper, a bankruptcy attorney in Orlando, Fla., reminds distraught clients that the American legal tradition of allowing for bankruptcy stems from Deuteronomy 15:1-11, which calls for debt forgiveness every seven years. Others agree with Mr. Alper that those who are able should repay, but those unable to do so should not feel guilty.

William J. Stuntz of FirstThings.com in the article Law and the Christian Story explains the behavioral phenomenon of somebody facing a huge amount of debt, like me [emphasis mine]:

The most obvious form of legal amnesty is bankruptcy, at the heart of which lies a simple behavioral phenomenon with an interesting twist. The simple phenomenon is this: A debtor who is already in over his head will not pay, whether or not there is a legal mechanism for discharging his debts. There is a kind of Laffer curve of debt: A little bit tends to be repaid; a lot tends to be ignored. (Hence the old saying that if you borrow a little money from a bank, the bank owns you, but if you borrow a lot of money, you own the bank.) This simple phenomenon has a simple explanation: If all or almost all my future income is going to go to my creditors because I am drastically overextended, I have no incentive to work. I’ll starve if I work (because my creditors will take everything) and I’ll starve if I don’t—but at least then I’ll starve without having to work. By demanding everything, my creditors will get nothing, because I am in a hole too deep to dig out of.

The temptation is to say, it can yield nothing else—the debtor who is in way over his head can’t and won’t pay, so “forgiving” the debt is really just an acknowledgment of reality. But that ignores another option, one the law embraced not so very long ago. In the early years of our nation, debtors who would not or could not pay were imprisoned—a very common rule in many legal regimes going back to ancient times. Recall Jesus’ story in Matthew 5: “You shall not come out of there until you have paid the last cent.” Imprisonment for debt is really quite logical: When ordinary civil remedies no longer work, the system should, one might think, resort to more serious punishment. And the truly improvident debtor has often borrowed money he should have known would be beyond his ability to repay. This is akin to theft, and in modern legal systems theft leads to imprisonment. This points up the real choice the law faces when a debtor is in over his head. The law can of course wipe out the debt, as it does. But it can do something else instead: it can wipe out the debtor.

A New Chapter (7) in my Life?

I recently met with two bankruptcy attorneys and ran my situation by them (including liar loan issues). They see no reason why I can’t just go with bankruptcy right now and wipe off all my debts. Since I am NOT trying to protect any assets, Chapter 7 bankruptcy is the recommended option for me.

Note, bankruptcy will not wipe out the liens on the properties - just my obligation to repay the note. So the lenders will continue with foreclosure. But bankruptcy can stall the foreclosure process by 1-3 months. That may give me extra time to sell the properties and pay back the lenders as much money as I can. I want to minimize the loss to my lenders as much as possible.

With the moral issues in mind…

Should I BK or not? What do you think?

94 Comments

  • 1. Financial Freedom
    October 23rd, 2006 at 11:16 am

    Yes, you should file for BK. And yes, your mentorship under your “rich dad” is the best way to go. Getting a J.O.B. means you are Just Over Broke. I don’t care if you have a job that pays you $100k per year, that is not what you need. What you need is KNOWLEDGE and that is what you are getting from this mentorship. Once you get a couple of deals going, that is when you are going to see the snowball. All the naysayers on this site are the people that are sitting at their desk working 9-5, making a nice salary and benefits. But who of these naysayers have gone out their comfort zone and invested in themselves instead of spending all of their time making someone else rich.

  • Gee are you going to keep asking us what we think until you hear something you like?
    By the way if you think your credit card bills just disappear think again.

    And SHAME on those pesky lenders that keep bugging you! I mean you lied to them to get loans and now they want them back and are harrassing you? Next time get a loan from Vinnie and then tell him to stop “bugging” you. He won’t bug you anymore..he’ll just do the world a favor and wipe your stain of the face of the planet.

  • I don’t know if you should BK or not, but one this is certain: this stuff is catnip.

    If your “blogging” intent is to generate a a slew of morally indignant hate-mail (and then hate-mail about the hate-mail): mission accomplished! Young man you are an idiot-savant for the age… christ, if you can churn out this stuff why not just give up the real estate/get-rich-quick flim-flammery and write full time?

    I’m serious - if you aren’t a one-hit-wonder you should be able to get a bunch of blogs up in no time designed to tickle the fulimination-bone of a whole spectrum of cranks, from gold-bugs and housing-bubble-maniacs to saucer-nuts and rosicrucians (look it up, my young friend.)

    I think you could even micro-market - in housing alone, for example, you could have a blog specifically aimed at making the big-college-type-word bunch over at Patrick.net bonkers (you know, lots of digressions into ’sociology’) and another one targeting the more blue-collar/self-made-loudmouth crew at Ben’s blog (I dunno, call it “real-estate-always-goes-up.com” and pound out Tom Vu-style daily fictions about how much cash is pouring in, that sort of thing.)

    I for one will be adding to your click-count or whatever the damn thing is daily or 10 times a day if you can keep the word count up.

    Sincerely -

    Your biggest fan.

  • Yes, declare it. Bankruptcy does not “cause lifelong damage”; unchanged behavior that originally led you to BK is what causes lifelong damage. BK is off your report in 7-10 yrs, and then you are like you never declared bankruptcy. I have known several folks that have gone through it, and they are much better for it - they sleep better, their attitude is better, their stress is less, and they are now able to save some money; provided, of course, they keep the bad behavior that led them to BK at bay.

    By the way, why can’t you just contact your mortgage co/bank & give them your deed in lieu of foreclosure? It’s called, “Deed in Lieu of Foreclosure”, and it is legal.

  • The comment moderation is killing this blog. It was fun for awhile, but now it’s come to a screeching halt.

  • Should you BK or not? You write that as though you have a choice. You are, for all intents and purposes, already bankrupt. The legal filing merely formalizes what has already happened. The sooner you ‘take your lumps’ the sooner you will get out from under your debt and back on the road to prosperity!

    Plus, within 6 months of filing bankruptcy you will be able to get a new set of credit cards (albeit cash-secured with astronomical interest rates) and start rebuilding your credit score. Why? Because you’ve already proven yourself to have no fiscal self-control, plus you can only file BK once every seven years so the CC company can squeeze you mercilessly if/when you get into trouble again. Lenders love that kind of thing.

  • Casey,

    I found this article on bankruptcy today dispelling some myths of the new law: http://articles.moneycentral.m.....uptcy.aspx

    It sounds like you’ve spoken to some professionals so you know what’s ahead of you.

    Bankruptcy would certainly lift some weight off your shoulders and allow you to continue to pursue your dreams.

    If you do choose this route, try to save one of your houses. That will supply a nice asset to mount your comeback.

    While you’re doing this “office work” during the day, I would also suggest you get a part-time job at night to supply some income. Retail jobs that pay base plus commission would be a good place to look. They also offer flexible schedules.

    Good luck,

    Nigel

  • You had no problem pulling every amoral and unethical trick in the book to get your loans, why should anyone believe that suddenly you’ve “found Jesus” and care a whit for the moral aspects of bankruptcy?

    Let’s face the facts, BK will ruin your ability to take out future loans - THAT is the one thing stopping you. All this hand-wringing about “what would Jesus do” is simply an act so that, regardless of what course you finally take, you hope people will believe you are a good and ethical person.

    Maybe the judge will go softer on you when he sees how carefully you considered the whether BK is the “right” thing. Heck, you Googled it, cut and pasted relevent passages and everything!

  • Uzbekistan is 90% Muslim, my nephew married an Uzbeki woman - she’s real dark skinned as are almost all people from Uzbekistan. Looking at you boy, I can tell that you are not following Allah, and you are about as Uzbeki as I am an eskimo. This is getting too boring - better get a new script writer for this.

  • If declaring bankruptcy will help more than it hurts, and if you have no (sure fire) better alternatives which cannot be implemented if you file bankruptcy, declare bankruptcy. If you have other things that can help with or without bankruptcy, do them as well.

  • $400,000+ going up more than $1000 per day. If you could stop the bleeding and “stabilize” at say $500,000 debt and an income you could be back out in 6-8 years. The moral thing to do is admit that you and your spouse cannot dig out of this hole. Every day that goes by is the immoral act at this point. Your “efforts” at this point are ones that leave lenders with yet another month of accrued losses and a depreciating asset.

    Let me guess; The 2 BK lawyers both assured you that they could “arrange” the terms of your Ch7 BK so that you could dischage all your debts. All they needed was a retainer, in cash, to get started. They know the score, you are their cash cow now. They’ll stand in line 2nd only to the taxes and penalties to collect their pounds of flesh once they’ve hooked you. And your case is so complex they’ll collect a lot.

    Use those purported web skills and find out about DIY BK and also stop worrying about the moral implications. The banks don’t care, honestly no one cares. This was business. Sometimes business goes bad. And understand, the people who ultimately own your paper have built in loss reserves, they really didn’t give you money in a weak moment. They don’t even care about your individual case of lying and/or luck. Their models include lying and bad luck. At this point the moral thing is to prove their models sound. Besides, as much as you debate your options, you don’t have any.

  • 12. Rich Creepy Uncle
    October 23rd, 2006 at 12:32 pm

    Ahh, now I understand. Your new “get rich” scheme is post the most ludicrous nonsense and babble on this blog, and collect tips in a tip jar and get a few points of revenue from Google-smart ads? I can’t think of any other reason you’d do this.

    Or maybe you want attention.

    Unless you really want sound advice, and if that’s the motive, listen: declare bankruptcy. Get it over with. Stop the nonsensical thinking that you can rescuse yourself. No amount of work at any payrate will pay off this debt anytime soon (and potentially, never in a whole lifetime).

    Even your Bible verses are misused: when Jesus talked about paying off every last penny, that was to the unfortunate soul that agreed to do it. Jesus’ advice was take the free forgiveness, and then hand out free forgiveness to others, when they wrong you. The entire Bible teaches that Jesus bought forgiveness of your sin FOR YOU on the cross, by believing in His work there. Why would you try to pay bills that you’ll never pay with forever to do it? Declare bankruptcy now and get it over with, and be forgiven.

  • Casey, Casey, Casey…

    “if I take the bankruptcy route and wipe off my debts, I can focus on rebuilding my real estate business”

    WHAT REAL ESTATE BUSINESS??? I have yet to see even 1 shred of evidence that you were conducting business.

    Committing fraud and getting yourself into 200k+ debt is NOT a business.

    It’s painful to watch you. What will it take for you to wake up and realize exactly what you’ve been doing?

    Also, you keep pissing around with excuses, rationalizations, your “mentor”, your blog and everything but producing an income. Stop making excuses and stop being lazy and GO GET A REAL JOB.

    After you pay back the money you borrowed and come to terms with the mess you created and save up some real working capital, then and only then should you think about running a business.

  • Go for bankruptcy as last resort and it looks like you are close to your last resort.

  • re: “Financial Freedom” comments;

    You have no idea what you’re talking about and you sound like a true deadbeat yourself.

    I’d venture to say you’ve gotten sucked into the scam seminars and cult-like junk they promote. You people are all the same, lots of talk but hardly a dime to your name and never one penny of actual profit. I’d bet on it.

  • re: “and then you are like you never declared bankruptcy.”

    Sure, if you lie on future loan applications that ask if you ever went BK.

    Just because it eventually falls off your credit reports doesn’t mean it never happened.

  • I think it’s pretty clear to everyone except yourself that you have no choice but to file bankruptcy. All of your available options leave you with more debt than you can reasonably repay.

    Like some of the previous commentors, I find your increasing piety amusing. When you got yourself into this mess, you didn’t show any moral convictions, so the sudden development of a consciensce seems like more of a deathbed conversion than anything. While the fact that you lied (or at least intentionally misrepresented yourself) on an individual loan application may not be all that shocking, the fact that you fraudulently aquired six in such a short time span shows that you were intentionally misleading lenders. Where were those morals then?

    Furthermore, I think it’s pretty clear that you have no intention of truly changing your ways. Your unwillingness to get a wage job or move into one of your homes shows your unwillingness to settle for the slow road to recovery. Listen to Nigel. Considering your decision to gamble on “Rich Dad” getting you out of this mess, it seems like your hesitance to file bankruptcy has more to do with the problems BK will cause for you in continuing to play the real estate market. Let go of your deathgrip on RE investment and realize that this is not the place for you at this point in your life. Also, keep in mind that it’s not just your life you’re playing with here.

  • Um, no, most successful entrepreneurs have not done bankruptcy. Sure, successful people do fail, but to say “Many of the most successful entrepreneurs have gone through bankruptcy at one point in their career” is just a lame attempt to sooth your ego. A truly successful entrepreneur would own up to the mistakes they made, rather than going in 100 directions to find out where you can lay the blame or find differing levels of justification for your failure.

  • 19. francotirador
    October 23rd, 2006 at 1:30 pm

    Casey: If all that you have written on this blog is true, you are absolutely the biggest moron out there. If it isn’t, you’re a literary genius.

  • OK.

    First things first. I am not an attorney, and I am not intending to give legal advice. These opinions are based on personal belief, but I suggest that you seek competent legal counsel before following any opinion I share.

    You may not need to file BK. I do not know your complete situation, but based on the information you provided, BK would probably be the wrong answer for you, just as it is for about 1/3 to 2/3 of people who file. If you speak to a BK attorney, what do you expect his/her advice will be? (Think, how do they make their money?)

    Here are my thoughts, in no particular order:

    1) If no one is suing you, you don’t need protection. Even if you are sued, creditors are severely limited in the amount of your employment income they can touch. This may vary by state, but in California it is 25% of the amount above a threshhold based on the size of your family. This is probably far less than your payments would be anyway.
    2) I recommend that you approach your lenders about doing a short-sale on the properties. This may stave-off foreclosure long enough to complete the sale, and your 1st TD holders will likely allow you to do this. The people holding 2nd TDs on your properties won’t be happy (they get screwed, but you still owe them), but you can’t please everyone.
    3) Tell any creditor who calls you to stop calling. Tell them to conduct all communications via mail, and I suggest you set-up a PO Box for this purpose. You can follow this up with a letter sent to each creditor, certified mail with return receipt. This can protect you and provide you options under the FDCPA. You may also want to transfer your current phone number to a voicemailbox and set-up a new, unlisted number for your own use.
    4) The unsecured creditors might not pursue you in court. Make small payments every month, even if only a token amount to each card. Do not skip any 30-day period. If you make token payments, this shows an effort on your part to comply with your debts.
    5) Talk to your unsecured creditors. You may be able to work-out no interest or reduced interest terms until you get back on your feet.
    6) Regulations vary by state, but generally, a 1st TD holder is limited to recovery of the subject property only. A 2nd TD holder can pursue you for a deficiency on the balance owed, but some or all may not take you to court. This is especially true if they can’t find your physical address or contact you via telephone.
    7) You definitely have some exposure for fraud. You should not take this lightly, because if any lender wants to push the issue, you could have problems beyond your civil liabilities. You may want to consult a criminal attorney, just in case. You may want to have a waiver drawn for negotiations with regard to your short sale offer. Again, get competent legal counsel to help you with this.
    8) A Chapter 7 bankruptcy will follow you for 10 years. Do not expect to get this off your credit report any sooner than that, no matter what the classified ads tell you (credit repair).
    9) Walking away from your debts now means that in 7 years or less, these items will leave your credit report. Check with each state’s Statute of Frauds for the length that certain types of debts are enforceable. Generally, unsecured (non-mortgage) debts are enforceable from 48-54 months after the date of last consumer charge or payment, and mortgages (2nd TDs) are enforceable for six years after date of last payment.
    10) You may contact me if you would like to discuss any of these options, but again, I am giving you a lay opinion, not a legal opinion.

    Creating this blog was an interesting strategy. I am not sure of your true motivation in this, but for better or worse, keep in mind that if one of your lenders sees this, they may want to make an example out of you, much like the IRS pursues activist tax evaders for even minor infractions. Be careful.

    Good luck to you.

  • Am I right? AM I RIGHT? Look - all it took was a couple of mentions of the good lord and at least a few of the haters and “loosers” come buzzing like flies to s***. The Psalms?DEUTERONOMY????? Improvisational genius - a Liszt-like stir of the pot.

    But then you followed it up with a way-too-earnest “question” which has generated far too much “advice” from well-intentioned rubes who think you are actually looking for it. Ah well, can’t win em all.

    (Incidentlally, I should have mentioned earlier that the “looser” bit has meme written all over it - well done!)

    In retrospect it looks like this post has the potential to kind of suck the wind out of things for a bit - I think you need to get a post up along the lines of “I’ve got a lead on a hot property that’s going to bail me out of this mess”, and pronto. That should set the masses riled up again and have them chewing on your a** like a dog with bone. Which will of course bring in the got-get-em-Casey brigade in full force.

    Also in agreement that the moderation is killing this - need something much more real-time to whip up interest. Momentum young man, that’s the key.

    Sincerely,

    One Who Admires.

    PS need to hear something about how the little lady is taking things. Not all at once, but let it slip out in a way that keeps us tuning in for the next installment.

  • This blog is heavily moderated… I am leaving and will post about Casey and Rich Dad on other blogs.

  • 23. Martin Chambers
    October 23rd, 2006 at 2:02 pm

    I really feel for you kid. If you want to avoid the whole “Squeal like a pig…you got a purdy mouth” thing, I’d head to the airport and move to Australia. Change your name, keep a low profile and take on menial work that doesn’t attract attention. Wait for the statute of limitations to kick in then come back to America and write a best seller. Embellish the s*** out of your story so that Hollywood is bound to come knocking for the movie rights. You’ll be laughing.

  • Casey,

    You’ve had your blog for two months and these last few posts seem rather manic. First, you talk about your “Rich Dad” and how the sky is the limit. Then on this post, you discuss mulling over the possibility of going into bankruptcy in a rather glum perspective. Emotionally this is a difficult time but you still seem to have issues with impulse control. More specifically, you seem to demonstrate some attributes of pathological gamblers. I’ve known people like this personally. They would tell me how they card counted this past weekend and won $3,000 only to later tell me that they were $50,000 in credit card debt. During their streak they would seem euphoric and all of a sudden, as if a grey cloud was over them, they would regress into a slight depression.

    I would say this is immaturity but I’m only a few years older than you and have read many of the same financial books as you have. The advice of many on this blog is very helpful. I’m all for having a mentor. But why does it have to be during the 9 to 5 timeframe? Why not mentor with him during the weekends or the evenings? And at this point placing limits on what you need to do is rather limiting. You need to think about all options including bankruptcy. You need a nine to five PLUS creative ways of making extra income and this is where your “Rich Dad” comes into the picture. After reading the articles about you in the mainstream media, do you not get a sense that you are being portrayed as someone that does not understand real estate? Even the average Joe on the street can see that what you did was ridiculous, a case study in greed and systematic problems with the current real estate market.

    Here is some advice from the forum that you need to take:

    1. Get some steady income from a paying job.
    2. Work with your mentor on the weekends or evenings.
    3. Discuss your bankruptcy options with a qualified lawyer.
    4. Take a week off this blog to write down your plan for the next year.

    I think the last one will help you somewhat because you are still eating up this pie in the sky view that you are going to come out of this without a scratch. You say this isn’t true? Why in the world are you quoting Robert Kiyosaki as if it were some bible verse? From the financial numbers you are throwing out and stating that for your unsecured debt you are bleeding $4,000 to $5,000 a month, bankruptcy seems like the only option.

  • Casey,
    BK releases you from your legal obligation to pay back your debts, not your moral obligation. In your case you can declare BK and claim legal protection ( for those debts not incurred fraudulently) and then over time you can pay back “every dirty penny you borrowed”. I am sure that paying back money that you borrowed to purchase items you used, consummed, or gained from would be the most pleasing option in the eyes of your maker.

  • As much as this is your fault, it’s also the banks’ fault for lending with no standards.

    Go bankrupt and teach the banks a lesson.

  • Nasty comments.

    I can understand why though, some of the posts on this site are a little bit fishy. I, myself, can’t fathom how someone would be so naive as to invest in that many properties at one time and expect to be able to move them all safely. I would consider flipping one property at a time, that seems reasonable. Worse comes to worse, I can afford to make the payments based on my current net income. But to try to move 10 at once? Why? How?

    Anyway, I hope some of this is fake because I wouldn’t want to read comments like this, personally.

    If you’re for real, good luck. If I were you, I would do everything possible to avoid bankruptcy. Even to sell a couple more places on your own would be a big asset. Or, why can’t you find some other investors to take the properties off your hands? Surely if you bought them for a good price you should be able to unload them to someone and minimize your losses?

    NG

  • You keep refering to your maker. Are you a Christian? If so, what better time to just completely lie your life in His hands and follow His way for your life?

    Although it is within his power to wipe your debts clean tomorrow, he might not do so. But what he certainly will do is give you love, guidance and peace. Blessings and good luck!

  • Ok Casey,
    I just wasted a whole day of my life reading your blog. (I found you because of the USAtoday article.)
    While at first it was immensely entertaining as I read on I became at first confused at your absolute refusal to even acknowledge others sound advice or honest (not haters) opinions. And then over time I realized, you just don’t care what people think or say, that this is either an elaborate scam or you are so mentally disturbed you see only what your sick minds wants too see.
    So after wasting a day of my life on this I would like to address the people that come to this site. Please don’t waste your time with this any longer. By posting and visiting here you are feeding this sick individuals fantasy. He clearly needs help by a psychiatric professional.
    Ok that it all.
    Kerriella

  • Don’t give up Casey. Filing for bankrupcy is giving up and throwing in the towel. Sell you houses and pay off your debts on your own without using the cop-out of bankrupcy.

    Win on your own.

    You can and will pull this off but it will take time.

    Don’t give up now.

    Don’t file for bankrupcy.

  • re: “it isn’t a moral decision - it is a business decision.”

    Yeah, people who go BK and stiff their creditors of the money they borrowed always say that.

    Bottom line - If you file BK, you’re a deadbeat who borrowed money and didn’t pay it back. It’s all about morals.

  • 32. yougottabekiddingme
    October 23rd, 2006 at 5:46 pm

    Perhaps you and your imaginary BK attorneys should actually review the laws before posting about it. Under the new laws, whether you can file a Chap 7 or a Chap 13 is less about “protecting assets” and more about the means test and the presumption of abuse.

    And the houses will be considered assets, seized by the BK trustee and sold to repay your creditors. The only house you would even have a chance at keeping would be the one you are living in, if certain other tests are met (state expemtions or federal exemptions, whichever is appropriate for California). And since you do not live in any of them, and have not lived in any of them, and never had any intention of living in them, there would be no exemption for them.

    And once the BK trustee gets wind of your fraudulent means of obtaining credit, and that some of your CC debt was incurred to service your fruadulently-obtained debt, it will become nondischargeable. And you’ll be ExTREMELY lucky if the BK isn’t dismissed altogether as “abusive”.

    (Read the laws - it’s all there).

    (And I’d bet the farm your BK would get dismissed as abusive.)

  • I think you should look into getting a job as an internet media consultant. Apparently, you have decent design skills, a personable personality, and good writing skills.

    Remember how that Las Vegas Casino purchased those weird items on ebay that sold for a lot of money? One example would be Jesus’s mother Mary in a slice of bread. They purchased these items largely because it drew a lot of attention to them.

    Perhaps if a firm picked you up, they could latch on to the growing popularity of you and the website. So, not only would they get a person who has real skills on staff, they would be “licensing” the name of a growing internet phenomenon, the so-called “poster boy” of the housing bubble.

    Just a thought. When you’re back is up against the wall you’ve got to get creative.

    I am also of the opinion that you need to generate positive cash flow, so working to find deals for this “rich daddy” right now isn’t logical. Tell him how you do in fact need a positive cash flow, and if you could work for him part time or on the weekends while earning money during the week.

    Your focus may be too diffused at this point to work on commission only. I’ve done it, and was reasonably successful at it (I sold insurance to old people by going door to door), but like I said it takes an Iron Will and Absolute Focus. A regular job would give you that focus because it would be imposed structure. That isn’t what you want to do right now, obviously, but a 9-5 job is only temporary if you truly have what it takes to make it as an entrepreneur.

    Finally, as other investors have pointed out, you must learn from this experience. It is very important to differentiate gambling (speculating) from investing. Try to read some good articles about gambling psychology, and be honest with yourself. In your free time, take higher level math courses (up to calculus), business statistics, finance, and real estate finance.

    A decent book that I recommend is “investment valuation” by damodaran. It includes a section on evaluating real estate.

  • No where in the BK code does it say you can’t pay back your creditors after you file, it just says legally you don’t have to. So there is no moral dilemma here, get off your high horse.

    If morality is you’re your new guiding force you could still pay back “every dirty cent”, whether or not you file for BK. Of course we all know that will never happen and that this is another diversion tactic to keep you from facing reality (of course I, like many others, are wondering how much of this stuff is real anyway)

    PS I can’t wait for your next blog to see what you come up with next. Here’s my best guesses:
    1. You will try and play some variation of the Race Card.
    2. You will claim you were molested by a Catholic Preist
    3. You will claim you were drunk, or addicted to prescription drugs at the time you made the deals.
    4. All of the above.

    BTW The pic of you sitting on the Swiss ball, pretending to act like you know what you are doing, cracks me up every time I see it.

    PS: Have you ever considered a career in politics?

  • And yet, you could verily easily stave off bankruptcy if you rented those houses, and did some pick-up work here and there.

    You are an idiot.

  • “On the other hand, if I take the bankruptcy route and wipe off my debts, I can focus on rebuilding my real estate business and moving forward.”

    I can’t believe what I’m reading here either…

    Dude, you have no real estate business to rebuild. You’ve committed multiple counts of wire fraud and bank fraud to the tune of $2.2M and you’ll be lucky if you’re not arrested by the FBI. That’s not a business, that’s a criminal enterprise.

    There’s laws against this because it’s wrong. It’s not fair to the rest of the people who are investing in real estate, nor is it fair to the people who buy the mortgage-backed securities that your loans are sold off into. Those securities become worthless when you default and someone’s out their investment.

    What you’re doing is illegal and unethical, period.

  • Chapter 7? You wish!

    It’s hard to imagine you really spoke to a bankruptcy lawyer, let alone three. Fraud will throw a giant wrench at any effort at Chapter 7 or even Chapter 13 bankruptcy. Furthermore, you might want to double check to see that your income does not exceed the California average - which would also kick you into Chapter 13.

  • At least you’re seeing one (or more) bankruptcy attorney’s. I agree with many posters, you need professional advice, not random advice on a blog.

    But I do wonder if filing BK will actually be a choice. How long has it been since you’ve paid on the loans? At some point, the banks are just going to foreclose anyway.

  • If an overweight person goes into a nasty all-you-can-eat buffet and eats until they puke, should the customer or the restaurant clean up the mess?

  • Wow Casey, I finally get it.

    You rate up there with the top political cartoonists of the day.

    This blog is nothing but a brilliant metaphor of the Bush presidency in action.

  • You could actually file a chapter 11 bankruptcy and keep the lenders at bay for more than a year. In the meantime you could still collect rents from your houses and legally take “asset management fees” on the gross rents you collect while you don’t pay the mortgage. Maybe you can be shrewder with your bankrupcy than you were with your purchases?

    Any why haven’t you still rented your houses? In the time you have spent making excuses about why you have not rented them, you could have got them rented.

    And what’s with this no work after 5.00pm and no work on weekends B.S? Do you want ot be rich or not?

  • Casey:

    If you want to look at this as a moral decision, then fine. But unless you borrowed from The Christ Hard Money Group, it’s unlikely your creditors are making their decisions based on moral fiber. Should they book a loss now and get it over with or do they want to keep Casey’s debt on their books forever? I don’t know. But they’re probably not looking it up in Deuteronomy 15.

    I’m not trying to make fun of your faith (okay, maybe just a little), but bankruptcy to your creditors is not about judging you on your morals. You might think that way, but if so, then it only exists in your head.

    If it really bugs you, you can always just do your best to pay them back for the rest of your life. They book a loss now AND they get a bonus later. You can even a new last will and testament that leaves all your assets to Countrywide. If morals concerns you, I can’t believe that if you DIE, and you leave all your worldly assets to your lender, that your “maker” is going to give you any hell for it. (Pun intended). You may have other issues in that arena, but bankruptcy won’t be any part of it.

    “Casey Serin, huh? Heaven or Hell? St. Peter, would you run his FICO?”

    No, I’m pretty sure that doesn’t happen. And besides, if he’s omnipotent, I guess he doesn’t need to pull credit.

  • “If an overweight person goes into a nasty all-you-can-eat buffet and eats until they puke, should the customer or the restaurant clean up the mess?”

    It depends. Intentional greedy puking to milk an “all-you-can-eat” buffet for all it’s worth is unconscionable and should never be rewarded. That’s immoral and could only encourage future puking.

    And what if an underweight person were said puker? I figure any moral code based on puking should apply equally — or am I missing something?

  • 44. Harry Fisterbottom
    October 23rd, 2006 at 8:35 pm

    This story is becoming stale, Casey. You should introduce some new characters.
    Like:

    1. Harry Fisterbottom, a tough-n-rough-no-frills-guy-who-calls-it-like-he-sees-it-yet-has-hands-that-smell-rather-peculiar…

    or

    2. Senor Tuffiass, he could be Fisterbottoms arch-nemisis. S. Tuffiass despises walks in the park, bluebirds, and apples…

    but, stories become stale if it lacks a love interest

    enter

    3. Hepizbah, a mysterious, yet senuous, octogarian who smells like bengay.

    Casey, the people have spoken!

  • Act I [lasting seeming endless days, weeks, months]:

    - Casey debates strawmen and jousts at windmills he sets up for himself as he blogs to the world his incompetence, greed, and crimes.

    Act II

    - Casey seems to have found reprieve: a job with a “rich dad” mentor. It is to be but a false hope, however.

    Act III

    - Casey’s “job” doesn’t spare him from the wrath of his creditors.
    - Bankruptcy.

    Act IV

    - A maelstrom ensues as Casey’s creditors, in due course of discharging their obligations, discover self-admitted, documented, and corroborated examples of fraud.

    - Criminal action.

    Final Act

    - Casey’s bankruptcy behind him, he finds he still owes most of his original debts, only now structured and administered by a court of law and levied up on his foreseeable future earnings for decades to come.

    - Casey is notified he is to be questioned by a District Attorney.

    - Casey receives a very official looking letter from the IRS.

    [ Casey stares at the envelop, hands trembling white, starts as if to open it, then sits it on the table by the door and walks out without a coat. ]

    — “A Modern American Tragedy”

  • One thing that is important for the other commentators to realize is that Casey isn’t 100% at fault. The very existence of loans where you don’t have to precisely state your income, or the lack of veracity in thoroughly checking out an individual before approving a loan, means that the banks are at fault too.

    Everything is a clusterfu** regarding mortgage loans at this point. I predict there will be an overhaul of the entire system just like sarbanes-oxley overhauled accounting regulations.

    I have read that in the last four years, over 40% of the loans given out to people are ARMs or worse. That means that most of these people purchased their over-priced homes with income they hoped would increase in the future.

    It is important to note that the housing bubble began imploding in 2001 once the number of these exotic loans skyrocketed. It was at that point where you might have become VERY conservative about investing in real-estate, not knowing when the burst of the bubble would rain down on everyone else, as it is now.

    Casey resorted to riskier schemes to bail his a** out when he first started losing the game, which was at his second or third house sold. He should have called in the troops and folded his hand then. The banks, in their lust-fueled desire to reap as much revenue as possible, are also accountable because of their inability to accurately measure the risk inherent in these loans.

    Finally, what this all boils down to is easily available credit via the lowering of the interest rates over the several years. Few know that the major banks only have to have, on average, 10% real reserves on deposit at the Federal Reserve. Theoretically, if you deposit $1000 cash at a local bank, they can then lend out of to ten times that amount. Essentially, it is a license for the 12 major banks to print their own money.

    So, the money supply has been loosened to the point where a person on welfare with no real income can get five credit cards and a house (in the hope to flip it, surely). In the next three years, people are going to be foreclosing in mass as their payments double as a result of their ARMS. And like I said before, it will cause such severe stress to the economic system, much of the mortgage loan system will be overhauled.

  • To a poster who earlier stated that BK is a business not moral decision and that lenders expect a certain amount of that and don’t care, that’s absolute bullshit.

    Retail stores expect a certain amount of theft and plan for that, but nobody would say theft is therefore a business decision.

    Get a real job and don’t listen to seminars. Kiyosaki made practically all his money from books and seminars, not from his relateively average investments.

  • greedy little pukes like you are making America unlivable for those of us here that still work an honest living in order to realize the dream of an affordable house and a family.

    You should be rendered destitute and have your legs broken by the myriad of agencies to whom you owe money that you never really had…….

    PUNK!

  • 49. La Faux Veritas
    October 23rd, 2006 at 9:17 pm

    Anon. I am your biggest fan. Two great posts. I was howling.

    Casey. This “Rich Dad” gig is brilliant. You can learn a lot from this man. He is an intelligent man, who knows a good deal when he sees one.

    Right now, he has free IT support for his office. What a deal. You know the Geek Squad wouldn’t be free. Clean the toilets, make the coffee. All free. Smart man.

  • Randy H-

    I don’t recall reading that Casey cheated on his taxes. In fact, since this all happened this year (2006), how could he have lied on a tax return he hasn’t filed yet?

  • Just in case you have a sudden bout of comprehensia today - send back the keys, file BK now. After that, maybe you can get a job as one of the new “model home occupants” that people are using for staging now…a gen Y kid who owns a nice new home and somehow has lots of time to enjoy it without working - shouldn’t be a hard role for you to fill.

    I’m guessing the blue pic was taken by a RE stager or a techie “entreprenuerial photographer” friend of Casey’s.

    I love how just about everyone who gets introduced to your blog has the same reaction, over and over again.

    Your maker told me that you need to attend some alcoholics anonymous meetings to gain some perspective and learn what it means to live one day at a time.

  • The Dark Side of Real Estate Investing…

    Maybe this is it, the worst case scenario, the dark side of REI…
    NLG

    ……

  • You seem to be wrestling with the Moral issues of BK. Fortunatly for you there is no law against being stupid. No insult intended, but honestly you weren’t to smart.

    We have BK laws because we no longer have slavery or debtors prison. Let me ask you this: while you and I and everyone else were paying 18, 20 and 24% on our credit cards, weren’t we paying for those who defaulted? You and I have already paid for a bunch of other people to walk from their credit card debt. Is 18% plus interest moral? I think not. So, in effect we have empowered a lot of others to go BK. Did the Credit card companies loose money? Heck no!!
    We covered their losses!! In fact default factors are built into all loans. So while you were actually paying your debts, your creditors made sure you covered them for bad debt.

    I am not advocating not paying your debts, but BK is designed as relief. In fact it is called “relief from creditors”.
    If you simply cannot pay your obligations, what else can you do? At this point there is no magic pill. You are confused, unser pressure and probably prone to grasping at straws. Your stuation, as described is not getting better.

    Your biggest problem though is the change in the bankruptcy law, effective Sept. 17, 2005, otherwise known as the “credit card protection act of 2005″. No longer can you simply go chapter 7 and walk from your debt. There is a much more complex and expensive filing proicedure and they scrutinize you closely and put you on a repayment schedule that can last, if I recall up to 7 years. It’s modeled after the IRS’s repayment program for back taxes. It’s in a word: draconian.

    You and a lot of other unwise investors will be faced with this. My advice? Do it now, get it overwith and go on. BK goes away and you are plenty young enough. If it’s any consolation 1 person in 60 went BK in 2005 so it’s probably safe to say 15% or so of the general population has in the past 7 to 10 years.

    Is it a stigma? Not so much anymore. And if you get with a savvy credit manager you can pretty much recover in two years, although the BK stays for 7 or 10…I believe 7yrs but I could be wrong on that point.

    But, LEARN FROM THIS!!!. We all screw up. But if you keep doing it, you loose long term. Einstein defined insanity as “doing the exact same thing repeatedly, each time hoping for a differant result”.

    Real Estate has and will probably continue to be the best way for the average person to make lots of money. I am 55 and have been flipping houses since I was 19. Guess what? I didn’t loose a dime in the last 3 years. I didn’t make as much because I realized THE MARKET SUCKED!! I bought with more than the usual degree of caution, and I didn’t buy much. For example I flipped 53 houses in 2003, 5 in 2004 and none since. I will lay low until at least the end of 2007. I’m waiting for guys like you to go away or at least get smart.

    Time heals all wounds and there are worse things than this. I remember the wise words of a friend of mine “At least they can’t eat you!” A bizzare viewpoint, but undeniably true.

    If you think this is bad, wait until you go through your first divorce.

    Hang in there kid. You’ll laugh about this someday. From the previous posts, it seems some of the more insensitive are laughing now.

  • I wasn’t planning on ever wasting another minute at this site but after I left last night I just got angrier and angrier.
    There is so much to be angry about in this that I am not even sure where to begin.
    Do I start with the fact that a 24 year old with NO ASSETS or VERIFIABLE INCOME was able to walk in to the bank not once or even twice but 8, let me repeat, EIGHT!!! times and walk away with home loans is utterly insane. The Banks that hold Casey’s loans should be under investigation at this very moment, if they aren’t then I would be extremely surprised. Casey, if you think you are protecting these people because you haven’t openly said their names your sadly mistaken.

    Or should I begin with the fact that Casey knowingly committed numerous acts of fraud across several states also knowing and not caring that he was borrowing (stealing) money that he had no way of repaying. I just refuse to believe he didn’t know he was committing a crime.

    Then there is the fact that I just don’t get why a bank would approve Casey 8 different mortgage loans when my husband has been on his job for nearly 8 years, is a verteran, makes nearly $25 an hour and we have virtually no debt but we can’t get a home loan that we can afford for a decent home because housing costs are so inflated, even here in Oklahoma. We could get approved for a loan I am sure but either the payment would be so high we wouldn’t be able to pay it for long or the house so dilapitated it would be falling down around us.

    Something has GOT to be done about a system that allows something like this to happen.

    Then the way Casey is asking for advice and people have given several wonderful suggestions but the ONLY thing Casey even responds to are the crazy comments and takes them seriously even at times when its obvious the person giving the crazy ideas is just egging Casey on. Does Casey really have that serious of an addiction? Or is he simply going with the most outrageous ideas to rile everyone up and call further attention to himself? Or is he purposely setting it up so he has a good insanity case for when he is prosecuted?

    What ever his motives are I believe this blog and the attention he is recieving is just feeding some sick need. I truely hope that if ANYONE in Casey’s life that has any influence over him reads this Blog then they are doing their very best to get him not only legal counsel but immediate psychotherapy as well.

  • Just as an additional thought for every poster here: there is a tsunami of “Casey’s” coming. His story will be repeated many thousands of times in the next two years or so.

    There may be so many that the authorities, courts, banks, lenders ect, will be simply overwhelmed. Subsequently, a lot of people will fall through the cracks.

    The BK courts will be clogged with cases, civil courts and banks will have so many foreclosures to handle, banks will be overrun with repo’s, dogs and cats living together…you get the picture.

    Personally, I look at this situation as one of the the greatest opportunity to make money in our lifetimes. Many thousands of guys like Casey, insane lending practices, crooked lender, appraisers, bankers, realtors etc drove prices to the stratosphere. When things settle down there will be a lot of good deal out there.

    This is going to be an interesting two years.

    Casey, sorry pal. You’re toast. Go BK, take your medicine, get on with your life. I bet Rich Dad is licking his chops at the coming holocost. I am.

    Am I a greedy bastard?? Probably. No apology from me as I buy your house from the bank at pennies on the dollar.

  • Just wait until Spring and prices will rise (prices always go up in the Spring). You can start flipping again and you will be fine.

  • Just because you declare bankruptcy that doesn’t mean you can’t repay what you owe when you have the money later. MANY MANY people have done this. You know you can’t pay them now, so foreclosure is inevitable, you made big mistakes, you lied, and you conned people out of money, so morally, you are obligated to pay them back. Just do it when you have the money later. It may take you the rest of your life and it may ruin your retirement, but its the right thing to do.

    p.s. Maybe you aren’t cut out to be a successful real estate entrepreneur? Why not go with what you are good at instead? You can build a business around your IT skills and ideas.

  • I don’t believe a word you type, not a single word.

    The reason? Everything you claim is sheer stupidity or so over the top as to be ludicrous.

    Anyone with a high school diploma can dispel your claims in a minute with a google search. I for one think you are a terrible liar. You are obviously not a high IQ kid. Which leads me to my next question?

    WHO IS REALLY BEHIND THESE SCAMS?

    The picture of you in the “Rich Dad’ office was STAGED. Just admit it. You extracted hundreds of thousands of dollars of cash at closings. You charged almost $150,000 in credit cards.

    WHO has all this money? Is “Rich Dad” the real genius here and you the patsy?

    C’mon, and for once be truthful.

    -You never saw a bankruptcy attorney, or if you did, they advised you that you are screwed.

    - You are not as “naive” as you try to come off as. You were a scam from the beginning. You have lied from the beginning.

    - You staged that picture. WHY?

    - You never had an offer for $248,000.

    - Your ‘Rich Dad” is another scammer, right?

    WHERE’S THE MONEY YOU OBTAINED BY FRAUD CASEY?

  • You are a complete and total idiot. I just read the USA Today article. Didn’t you do any research on Carleton Sheets, Russ Whitney, or Robert Kiyosaki? If you had, you would have seen the following:

    http://www.johntreed.com/Kiyosaki.html
    http://www.johntreed.com/ReedonWhitney.html
    http://www.johntreed.com/Sheets.html

    A hour worth of research would have told you to avoid these “gurus.” Instead, you do for the quick buck route, and you got burned, which I love.

    And it is people like you that result in loans being more expensive for people who actually work for a living rather than someone like you who think you can get rich quick by pushing pieces of paper around.

  • YOu definitely have some mental health issues. You are a scott peterson of RE. granted you havent mudered anyone. You are however a sociopath. you need legal and psychiatric help. you are a perfect example of everything that is wrong with a good chunk of today’s kis. you are lazy and don’w know what true work is. what you did for the past 12 months or so was NOT work. it was criminal and I do believe that deep down rou realize that but are infull blown denial due to mental issues. seek help before it is TOO LATE!

  • Hello Casey:

    Here is some information that may assist you in your decision. Many people who consider bankruptcy do not have the resources to pay an attorney to represent them. Thus, they have to consider representing themselves.

    Here is a direct link to the US Bankruptcy Court for the Northern District of California.

    http://www.canb.uscourts.gov/

    When you get to this page, click on 2 items on the menu on your left:

    Number One-

    INFORMATION MANUAL

    After you reach the Information Manual page, click on Court Publications - Bankruptcy Basics for cases filed on or after 10/17/2005. You will want to download this and print it out.

    Number Two-

    FORMS

    Here are the forms you will need to consider for your particular case. You may want to consider the “Chapter 7 Fee Waiver Application, In forma pauperis” form.

    As for the other forms listed, you will need to read the Bankruptcy Basics for your case and consult with an attorney to be advised of the other forms you will need to file. The Court Clerks do not give legal advice so DO NOT ask them which forms you need to file.

    There is a law school at UC Davis, and they probably have a free or low-cost law clinic where you could consult with a law student to proceed on your case. The law students are supervised by a law professor, so you should be able to get suitable help. The SF Bay area has probably the best legal resource help for people of limited means in the West.

    Another resource is the Oakland Public Library’s LAWYERS IN THE LIBRARY Program. On the first Wednesday of every month, they have a session for Bankruptcies only.

    http://www.oaklandlibrary.org/.....wyers.html

    Bankruptcy Court is Federal Court and you must pay close attention to Local Court Rules which differ from jurisdiction to jurisdiction, although the law is standard between all Bankruptcy Courts.

    ~Misstrial

  • Well. I have enjoyed the blog. Here is a short history of bankruptcy. I found it interesting because I always wondered where and why this notion of discharging debts cam from.

    http://www.bankruptcyfinder.co.....inusa.html

  • To address the complaints about moderation, how about starting a forum, in addition to the blog and comments. You could still moderate the blog comments, but it would also give people a real-time way to argue with each other. Other sites do this, I don’t see why it wouldn’t work here.

  • 64. Harry Fisterbottom
    October 24th, 2006 at 10:45 am

    I’ve got an idea. Maybe you could adopt children from Africa and include them with each house. That way, not only would people be helping you out, but they’d also be taking one for the team! Think about it! Africa adoptions are huge right now!

  • 65. you are crazy!
    October 24th, 2006 at 11:29 am

    Man, the comments are better than his blog. What geniuses we have tuning in here! I love it.

  • Sac Realtor

    You are so wrong. Prices in most hot markets will loose 30 to 50% in the next 24 months and the market in general will be stagnent for 3 to 5 years after that. Prices ain’t goin’ up.

    Kerriella;

    Markets alway RTM (Return to the Mean) Mean = Average.
    The true price of real estate is determined by 3 factors
    1)prevailing rental rates (return on on investment) , 2) presant interest and 3)Median income.

    This market in all locations will eventually return to the mean, meaning you and your family will be able to buy a house. In the mean time, rent and SAVE MONEY!.

    I’ve been at this a very long time, probably before you were born. Sometimes it pays to be the “old guy”.

    The market ALWAYS returns to the mean. Count on it.

  • i would call the Dave Ramsey show and/or read his book if you haven’t already. You may be familiar with his advice (no debt ever on anything but home, minimum 20% down on house with 15 yr fixed rate and no more than 1/4 of your pay mortgage etc)..but what you may not know is that early in his life he went through almost this exact situation but with many more zeroes.

    You should also realize that bankruptcy attorneys are going to tell you to file…that’s how they make money. It’s like asking a bank if you should take a loan. Good luck.

  • gran pubea,

    I don’t recall reading that Casey cheated on his taxes. In fact, since this all happened this year (2006), how could he have lied on a tax return he hasn’t filed yet?

    Apparently you’ve never run a legitimate business, or self-employed unincorporated business. Or did you think you got to just pay yourself untaxed cash all year long and then file a single magic form at year end?

    I love the Friends of Casey around here. They just assume that whatever they see others doing, and they do themselves, *must* be legitimate. Just because all you guys lie on your loans, illegally take cash-back, defraud lenders with wrap-arounds, and fail to file proper tax forms must make it all OK. Man, and I’ve been playing by the rules all these years. Silly me.

  • You are interested in filing Chapter 7 so that you can start over and make a fresh start with your Real Estate ventures??? GET REAL! You busted the first time and the market is slumping…GET REAL AND GET A REAL JOB!

  • 70. Anon (from Aus)
    October 24th, 2006 at 3:37 pm

    Matt’s comments about the advice of Dave Ramsey sound vaguely similar to what I was trying to show with the links to Anita Bell’s site - only she never had to go through all this crap before deciding she didn’t like owing money on anything except a home, and that she wanted to keep the debt on *that* as low as possible and pay it out as fast as possible… 38 months for her family home, between her income (minimum wage) and her husband’s (lowish middle), which is one helluvan achievement…

    Everyone has a certain amount of debt and risk they are willing to live under… but Caseys is just so ridiculous it isn’t even funny… you can’t call it a choice to live under that much debt, because he has no work that will pay the ongoing costs…

  • Randy H is a moron. Taking out mortgages does not generate taxable income. Collecting rents does. Short sales do as well. If I get a credit card and live off of it for a year, does that mean I’m “paying myself untaxed income”? That’s essentially what Casey has done. Get a clue.

  • I don’t know about either of you, Randy H and Gran puba, but I do own and operate a sole proprietorship retail business, and have done so for several years.

    I file quarterly estimated tax payments (1040-ES), quarterly state sales tax returns, and annual income tax returns (1040 with Schedule C). My state does not have an individual or business income tax, and my gross receipts are under the threshold for the state franchise tax.

    It seems to me that Casey is not exactly running a business. He most definitely did commit fraud, but he’s not going to incur a tax liability until he actually rents out a property, sells a property, or goes through with a short-sale. So far it looks like all he’s done is accrue a tremendous amount of debt.

    Casey–you should talk to a CPA about this, but I do believe the IRS has a test for money-losing “businesses” like yours. If you do not demonstrate a profit motive (and refusing to rent out your properties does look like you’re not even trying to make money), then your expenses like mortgage interest, repairs, etc might not be deductible. This will be a major problem and you should seek professional advice.

    -J.Barrone

  • 73. Another One Who Admires
    October 24th, 2006 at 10:39 pm

    To One Who Admires/Anon:

    I can tell you have quite a gift for literary criticism. I would like to encourage you to open a blog of your own, as your gift of written wit is arguably the brightest light in this cesspool.

    As far as direction, I was thinking Casey had a few options at keeping us reeled in. One would be a Pynchon like exploration of the fantastic, paranoid, and conspiratorial. He could start very simply, perhaps start discussing stalkers with something off-beat and humorous thrown in that they would all have in common, and then branch out into vague offers about shady employment… at least a bit more shady than fraudulent house flipping.

    Or how about a dip into Kafkaesque madness? Or better still, a passage on the guilt and delusions that accompany his crimes in the style of Crime and Punishment? There are many directions he could take this.

    As a complete artistic expression, your call on the now famous “Blue Picture” was dead on. Sublime and legendary indeed. I also agree that the red cup peeking out from beside the desk really does make the whole picture jump out at you. Just fascinating. I think Casey could probably make a pretty penny selling framed prints. I know I want one.

    Anyway, please keep posting. Your insights are greatly appreciated.

    To Casey: Please turn off the moderation. Just delete any posts that contain personal information and we’ll all be happy. Those who are so crude and insulting as to be deleted are merely insulting themselves. I’m sure you could find an honest moderator or two here if you asked around.

    Best of luck.

  • Casey, you will probably make more money from this website and blog than you lost on real estate.

    You really need to capitalize on all this attention.

    My guess is that you already are! I’m sure you are smart enough to realize this oppportunity.

    Very few people get this much press.

    That would be the a scream…if you turned this website into some real money. Talk about making lemonade out of lemons!!!

  • This advice comes from a two time chapter 7 filer.Once in 1981 which I did out of a nolo press book, im pro per and
    in 2005, with a bankruptcy specialist who also was a cpa.

    I know I have a problem with credit cards and have decided that they’re something I can’t handle ever again.

    I lost my house due to my problem and don’t intend to repeat this process ever again.

    Before my most recent chapter 7, I bought and studied the 7 and 13 books from nolo and decided paying for a good lawyer was the best course and I only owned 1 house, not 8.

    You definitely need a specialist,preferably one with real estate experience. And whatever you do, DO NOT LIE OR MISREPRESENT ON ANY BANKRUPTCY FORMS.PERIOD!
    You might find yourself with your petition dismissed and being prosecuted for bankruptcy fraud.

    Regarding the bill collectors,credit card especially, just send them to voice mail, and don’t pay them. I found out that they handle large dollar cardholders differntly than the run of the mill 500$ balance types. You will need all of your money to pay the SUBSTANTIAL bankruptcy retainer. I paid almost 1300$ cash , yours may hit 5k or more, just guessing of course.

    I am not judging anybody, Lord knows I have lots of skeletons in my closet, I am advising a course of action that is legally available to you.

    One last thing, this bankruptcy filing will be a huge legal gamble, it might get thrown out. If it does, there will still be options available,cross that bridge when and if it is necessary.

    Good luck to you.

  • I say screw the moral issue and just file for B.K. The way I see it, do you realize how many illegal aliens come to this country every day? Do you know how many illegals are having babies in this country? Do you know who is picking up the tab for thier housing, hospital visits, obgyn visits, food, etc? WE ARE!!! For pete’s sake, I don’t have health insurance and have to pay between $300 and $500 when I need to go to quick care but Jose Illegal and his 10 kids get full benefits whenever they stub thier toe. F#%K THAT!!! I say take advantage of whatever you can. I realize screwing over c.c. companies is different than our welfare system, but who cares at this point?

  • I can not even imagine having a “moral issue” with a BK. These creditors screw us over all the time, IN THE NAME OF DOING BUSINESS! If a corporation files a Chapter 13, or a 7 for that matter, it’s looked upon as a smart business move. If we little guys do it, we are the lowest scum on the face of the earth, as far as creditors are concerned. Your credit is screwed, whether you do the BK or not, so might as well do it, reestablish yourself within 2 years, then start all over and do it the right way. Just my 2 cents worth. ED

  • Kelli:

    If I follow your “who cares?” logic, would it be okay for me to hold up a liquor store?

    Let me know…

  • Check the garnishment laws in your state… Even if you do nothing and the lenders get judgments against you, it’s possible that they can only garnish your wages up to a certain maximum percentage.

  • Somehow, I haven’t noticed a comment by anyone who’s been through bankruptcy. I have. I lost my job in the tech boom and went 13 months without finding work. Finally took an $8 an hour job and my wages haven’t gone up all that much since then.

    I sold a lot of the stuff I had. There wasn’t much because we’ve always lived a pretty frugal life. But there came a point where there wasn’t anything else to do. I’d prefer to have paid the credit cards off. I’d been working on paying them down when I had a good paying job. I know that Christians will tell you that bankruptcy is wrong. I was truly led to consider it and to file. I did chapter 7 and it didn’t take them 5 minutes to go over my assets.

    If you are going to file and then just go back into debt, you’re wasting your time. If you file with the idea of never borrowing money again and living a more sane, frugal lifestyle, then it can be a blessing. From what I can see, it doesn’t look like you’ve learned your lesson yet. You still seem to be looking for a scam to get out of this. You screwed up big time. You lied and spent money you didn’t have to fund this dream. Grow up, get a job and stop looking for easy money. If you can do that, then bankruptcy might be an option.

  • meet your hero, Mr. Robert Kiyosaki himself! A lot of people are speculating on whether Casey is for real or another Lonelygirl15 type sham — after all, one moment he is talking about his depression, living on the edge of bankruptcy, his limited prospects and foreclosure deadlines. Then the next moment he’s chattering about his friend’s Rich Dad and a new project, and of course the 15 minutes of fame he is receiving from the media locally and

  • Casey,

    Bank Fraud….what an ugly word! JAIL TIME will be another education that you and the little misses will get (along with other things I need not mention) at taxpayers expense.

    Norman,

    Sunny Florida

  • 83. William Mc Devitt
    November 6th, 2006 at 11:43 am

    You can’t find your way out. You poor kid ! No one is going to help you until you help yourself. The real estate market is going to be very bad next year. The ship is sinking get off of it now

  • Do what you feel is the best decision deep down inside your soul. I’m 22 and admire what you have done and the risk you have taken thus far. Either way your 24 and still a fairly young adult. It’s like having an arrest record sealed because you were under 18. By the time your 30, your going to be looking back at this and laughing… whatever you do, IT WILL ALL WORK OUT. That’s the mindset I have whenever a problem comes my way..

  • After coming back home to Sacramento on Monday I was feeling very overwhelmed by the “reality” that was/is waiting for me:… * still facing foreclosure on 4 houses… * well over $150K of unsecured debt… * decision to file bankruptcy or not to file bankruptcy… * uncertain job situation… utah mortgage issues… * lack of discipline and lack of progress on December goals… * being too distracted to do any more real estate deals… * serious marriage issues…

  • of days.After coming back home to Sacramento on Monday I was feeling very overwhelmed by the “reality” that was/is waiting for me:…* still facing foreclosure on 4 houses…* well over $150K of unsecured debt…* decision to file bankruptcy or not to file bankruptcy…* uncertain job situation… utah mortgage issues…* lack of discipline and lack of progress on December goals…* being too distracted to do any more real estate deals…* serious marriage issues…* oh and on top of all that my laptop died!So I