Hacker News Reader

Comment by rayiner | Hacker News Reader

> But there is little money to see the sights. She earns too much to receive food stamps, and a lot of it goes to groceries. She tries to eat organic food, with her low blood sugar. That rules out cheap but filling Big Macs — as well as the food kitchens whose mass-produced meals, she decided, are unhealthful.

Why do newspapers use as examples people who seem to have done everything wrong? Is it because formerly middle class people are somehow more relatable to the readers of the LA Times than people who never had much of a chance to begin with? What about the poor elderly who never went to business school or were born in an area with few opportunities?

This lady gets almost $17,000 a year in pension and social security, which puts her just outside the bottom 1/5 of the income distribution. She’s presumably eligible for Medicare. In a rural town it would be enough for a decent living.

View on HN

I'd tend to agree, many of the critical decisions highlighted make her life much harder than it has to be.

"Organic" labeled food is much more expensive than beans, rice, and basic chicken. She even decides to buy a $21 prime rib dinner from a restaurant! the article mentions that it would be good for 3 meals. $7 per meal is much larger than what it would cost to make that meal yourself from groceries.

I feel for her situation, but it's hard to ignore a lot of the bad decisions she makes.

Another place in the article mentions she got a $300 speeding ticket for driving 43 in a 35. That's a pretty bad mistake to make when you are living on fumes.

On the one hand, the "organic" fetish is crazy -- you can eat pretty well at 300 cal/$, but not if you're buying premium vegetables. On the other hand, $300 for 8 over in a 35 is probably the evil result of her city not being able to raise taxes, and being forced to get revenue from more politically-appealing sources that usually shaft poor people. Parking fines, court fees, civil asset forfeiture, tickets for minor traffic violations, etc.

I'd say even driving at all is a mistake if one is trying to save money. Insurance is costly, gas is costly, and so are speeding tickets. I recommend to struggling friends to buy a used bicycle (some non-profits will give bicycles away for free) or to ride public transportation.

What do you imagine the public transportation options truly are in Darien Lake, New York?

She appears to have to park her camper at camp sites, bicycle use might or might not be practical (I suspect bringing groceries back from the store is functionally impossible on a bicycle).

Are you suggesting someone her age should bike dozens of miles per day to and from her job? And it's not like spending an extra hour a day on a bus is a great solution, either, possibly 2 hours on days someone needs to go somewhere other than work.

Maybe a recumbent bike. Maybe it's electric to help out. $2k vs $20k.

My first thought about that was, at 80, a simple fall could kill her.

Housing within bike distance of many jobs is also costly.

According to the article her friend died, leaving her a $20,000 windfall to buy a car.

> In a rural town it would be enough for a decent living.

It most certainly would not be. Survivable? Probably. Decent? Absolutely not.

And Medicare recipients still have out of pocket requirements, that's the whole reason Medicare supplement insurance exists. The average out of pocket expense for Medicare recipients in 2014 was over $4,000.

Tell someone making $1,400 a month they need to budget $350 a month for health care.

You can buy a 5BR house in Sibley IA (downtown, walkable to the grocery store and general store) for $330/month in mortgage. Add $350 in health care and you’ve still got $700 per month. Tight, yes, but definitely decent.

$700 to cover food, (gas, car insurance - probably a requirement in Iowa to do more than go to the stores), entertainment, a house repair fund, clothing, electricity/gas/water/sewer/garbage... That $700 is going to be stretched pretty damned thin.

And that's assuming that insurance covers everything health related (it probably doesn't).

Instead of splitting hairs on hypothetical budgets, let’s look at it another way. The median HHI is $43,000 and the median household size is about 2.7. (And remember, that is taxed while her SS and pension likely are not.) $17,000 as an individual living alone with no dependents probably puts her at the bottom of the middle 1/3. Middle third in Sibley isn’t just barely surviving. It’s a decent life.

Survivable seems right - but when someone makes all the mistakes she makes, do we think that doubling her income would give her a decent living?

It's hard to budget $350/mo when you spend $121 in a single day on food and entertainment.

Really, though, it seems like quite a few of her problems stem from trying to do this when single, without a roommate. With a spouse or roommate many expenses get halved.

Probably like $2400-$2800 if it's a pension and social security.

> > This lady gets almost $17,000 a year in pension and social security

    17000 / 12 = 1416.67

So no, not "probably like $2400-2800"

I guess I read it differently:

This lady gets (almost $17,000 a year in pension) and social security

Sorry, your probably right.

I saw this the other day on Reddit - I feel it's worth the read, and very relevant to this style of "they're doing it wrong" discussion:

https://www.reddit.com/r/personalfinance/comments/7ak7jm/its...

TL;DR: OP shows how a healthy 20-something could quickly overrun a $27,000 yearly income by just living.

> Why do newspapers use as examples people who seem to have done everything wrong? Is it because formerly middle class people are somehow more relatable to the readers of the LA Times than people who never had much of a chance to begin with? What about the poor elderly who never went to business school or were born in an area with few opportunities?

It will come as little surprise to many readers that someone who was forerly poor has remained poor. It is more notable when someone who was formerly comfortable is now barely scraping by. The latter will garner more attention from the audience and potentially will have more impact.

You didn't read the article, because just assuming X amount of money can work for anyone is not even remotely realistic.

She owes $50,000 on her credit cards. Let's assume an 18% interest rate. The minimum she could pay to actually pay off the debt (just enough to even pay the interest) would be $765 per month (54% of her income), which would take 22 years and 1 month to pay off, with $152,024 paid in interest.

She also has a $268 monthly loan payment for her aging rig. That means $1033 a month is going just to debt. And in my area, for someone getting on Medicare with no drug plan, for "original medicare", the estimated annual health and drug costs are $3,880.

So after medicare costs and debt, how much is left for housing, food, transportation, and incidentals, per month?

$60.

She's clearly going to die before she can pay her debt off, so maybe just don't pay the debt and use the $825 total to help pay for housing, food, transportation, and incidentals, all of which are higher when you don't have a residence or stable income. You won't have any credit and the creditors will try whatever they can to come after you, and maybe you can dodge them for a few years until you die.

Can you live off $825 a month? Yes. Will it be decent? Hell no. And if you have any major unexpected bills (such as emergency dental work and repairs on a rig, ballooning past $8000) you're fucked. Which, of course, happened.

> You didn't read the article, because just assuming X amount of money can work for anyone is not even remotely realistic

But we’re talking about the public safety net here, and that’s exactly the assumption you have to make.

She doesn’t need to pay her credit card debt. She can just declare bankruptcy. That’s the point of bankruptcy. She also doesn’t need a vehicle that costs as much as rent in small town America.

This is like the econ 101 assumptions. The public safety net is not designed for real people.

If she could declare bankruptcy, don't you think she would have? She's 80, she has heard of the concept.

The vehicle is her only shelter. Have you ever tried to pay rent with bad credit and no employment history? Not to mention, please show me a single place in all of the united states where rent is $268 per month and isn't a crack motel.

What do you mean, "if" she can declare bankruptcy? She makes $10/hour part time and all her assets are in a trailer. She is obviously Chapter 7 eligible.

You can rent a studio apartment in Chicago, in an apartment building (not a "crack motel"), for $350/mo. That's an apartment in the middle of a relatively expensive urban area. Clearly, there are non-crack-motel apartments that are significantly nicer than the Chicago apartment further afield.

If some miracle allows for the debt and loan to disappear, there's just the $323 a month for medical (which is probably not spread out over time, and she would have no credit to buffer it, so she would need savings, which she doesn't have). In theory she could have $1093 to spend on rent, food, transportation and incidentals.

But there are some requirements to file chapter 7:

- First she needs to document all her financial records, which of course she has been doing in expectation of this point in her life

- She needs to hire a bankruptcy lawyer, because otherwise she basically has to become her own lawyer and figure out her state/local bankruptcy laws and steps, which is very difficult for most people.

- Non-exempt property, such as cash, a second car or car she doesn't use for work, is sold to pay the debt. Does an RV you live in count as a car you use for work? if not, there goes her home.

- She has to get time off to go to the 341 meeting and do the mandatory credit counseling and debtor education classes and certification

- Filing for bankruptcy costs between $1,400 and $4,000 on average in filing fees and other costs.

- The whole process takes about six months on average, assuming everything works out.

I would love to know how somebody who's living paycheck to paycheck and can barely afford milk and bread can accomplish this. Clearly there are obstacles that she may not be able to overcome.

But I don't think anyone really cares about reality, looking at the way people in this thread are simply dismissing her using various theoretical devices to prove she simply isn't doing it right. If it were easy or simple to fix her life, she probably would have, because she is much more motivated to have a better life than random people on the internet. (Not that people not choosing to look at reality bothers me - it's people who do not fully understand the situation pretending that they know better that bothers me)

What "miracle"? Chapter 7 will eliminate her debt. That's the point of Chapter 7.

She'll need a professional to file for her, that's true. So, she should do what most people who file Chapter 7 do: use the money (saved gradually) she'd pointlessly burn trying to service the debt to hire someone to file Chapter 7.

In the meantime, she should immediately stop making debt service payments. It does not matter that the process will take 6 months, because her creditors have no practical recourse against her. Watch someone with a six figure income and significant luxury assets simply stop paying credit card bills that are integer multiples of this debt, and see what happens. Hint: the debt decreases as the credit card companies and their collectors realize you've stopped valuing your credit score. They're hoping beyond hope you'll spend some amount of money, any amount of money to avoid Chapter 7, and they will keep hoping for years.

The majority of Chapter 7 bankruptcies are no-asset bankruptcies. People who own homes, cars, and retirement accounts keep them in Chapter 7. A 79 year old woman living in a trailer isn't going to sell anything to retire credit card debt in Chapter 7.

It is not only wrong but borderline irresponsible to suggest that someone in this person's circumstances entertain the idea of sending another dollar to a credit card company. The credit card companies are victimizing her today, and she has a clear means of defending herself. She needs to be informed and counseled to make the decision to avail herself of that defense.

As for "reality", I've managed this process for people. I'm confident what I'm saying is reality, just like I'm confident that you can find a place to live in a "non-crack-motel" for less than $290/mo.

I'm certainly not advocating paying the debt. I'm saying dodge it. But she still will have difficulty saving up for bankruptcy.

With the little money she does get, she has to pay for transportation, food, communication, and health and auto insurance. Assuming she abandoned the RV she could maybe find one of these cheap Chicago sublets (which I assume are not in a food or transportation desert) and start saving money (assuming creditors can't garnish social security or pension). But she would still get hit with the occasional emergency bill, extending the time it takes to save. Once she finally saves enough she can go through bankruptcy and probably be successful. So then she could in theory just continue living in the sublet, or wherever in the country has the cheapest housing, until she dies.

It's not a very promising life to look forward to, and I don't know how many people would really just stop what they're doing and go full-on monk to recover over this kind of long term process.

At this point I think we've both disposed of the idea that the $50,000 in credit card debt is the burden it sounds like. I'm mostly writing because, again, I think a lot of people from that generation are loathe to defend themselves against credit card companies through bankruptcy law.

Either way: if she's getting good counsel, she's not paying the credit card companies. They're not getting another dime from her.

Hey, that's me! (Six figure income, stopped paying credit card bills.) Aside from the interest that continues to accumulate, you are absolutely correct: the debt does decrease:

At the 7-month mark one of the credit card companies (I owed them $15,000 at 29.9% APR) sent a piece of registered mail: if you send us 3 post-dated cheques for the next 3 months for $1200 each (total $3600), we'll consider the debt paid off.

I ignored them and did a Chapter 13 instead. (Well, the Canadian equivalent).

She can't pay back the credit cards. It is a grave mistake for her to even attempt it.

Unfortunately, and I think particularly with norms and expectations from pre-gen-X (and pre-universal-financialization) culture, it's a mistake a lot of people make. It's tragic: these are people who need every dollar they make, shoveling enormous amounts of their capital into a black hole. In reality, attempting to service these debts prolongs their exposure.

It's these sorts of bad decisions that I think Rayiner is referring to upthread. For someone in the financial situation the subject of this article is in, credit card debt should be off the table, full stop.

>Is it because formerly middle class people are somehow more relatable to the readers of the LA Times than people who never had much of a chance to begin with?

Hit the nail on the head. And not only is it the readers that skew towards middle class but it's the writers as well.

Every author has an audience. Her example is easier for people to understand within her cohort. If they had wrote the story about someone who did not reflect their readership people could view it without any “that could happen to me” thoughts.

Reply on news.ycombinator.com