Detroit is broke....but so are lots of folks.

[No Name Guy]

http://money.cnn.com/2016/10/13/pf/detroit-debt/index.html

About 66% of [Detroit] residents have debt in collections -- meaning more than 180 days past due -- at a median amount of $1,847.

Interesting enough....but this, which follows the above is even more pathetic.

Across the U.S., 35% of Americans have debt in collections.

And then this....... there's just so much wrong with this (bold added):

And buying a big ticket item like a car or a home is a major step to wealth building.

1)  WTF - 35% of people have debt in collections and ~2x that in Detroit.
2)  Hello....article author...buying a car is NOT a major step in building wealth....buying a car consumes wealth (depreciating capital item).

[Anon in Alaska]

A car might be a step in wealth building - if you're driving for Uber as a side gig.

[stylesjl]

The article did refer to cars as wealth building, but in the context of needing one to drive to and from work (and implies that many jobs are not accessible via public transport/walking/biking). If you don't have a job you can hardly start building wealth.

[slugline]

The way America has been built in the post-WWII era makes a car a necessity to function in many communities. Buying one is like "anteing up" into the employment game now.

[ender]

Wow.

I was going to call it out as a horrible clickbaity article but it's from CNN, so I guess it's really sad that 1/3 people have debt in collections. I wonder though what percentage of that is people who don't even realize it.

[SeaEhm]

one "human" would argue that they are rich because they live in America so they shouldn't be complaining. They need to get over themselves.

[Sibley]

I'm guessing you haven't been to Detroit? Public transit is really sad there - if it's even available. Having a functional vehicle in Detroit is usually a pre-requisite to having a paying job.

[zolotiyeruki]

I was going to call it out as a horrible clickbaity article but it's from CNN, so I guess it's really sad that 1/3 people have debt in collections. I wonder though what percentage of that is people who don't even realize it.

I also wonder about that statistic. How much of that debt is actually valid?  How many of those people are aware they owe money?  And how many are in collections for super-high medical bills?  I'm guessing the percentage of people who are in collections for legitimate debt, and who know about it, is significantly smaller.

[Guava]

Detroit has a lot of problems. The unemployment rates are high, the graduation rates are low, the job opportunities are near minimum wage, and that's just the beginning. The city is so big cars are needed to get around, grocery stores are limited if they exist, and the areas seeing any revival at all are areas where the residents can no longer really afford to live due to skyrocketing rents. I have been driving through the city the last 5 years, through the neighborhoods, and I have seen the city finally tearing down the vacant and burned out buildings but then that leaves empty fields that don't get mowed. One problem tends to lead to at least one more. I absolutely believe the number about how many people have bills in collections because I know how many people have unpaid water bills. It's not as simple as these people just being bad with their money.

[Metric Mouse]

Wow.

I was going to call it out as a horrible clickbaity article but it's from CNN, so I guess it's really sad that 1/3 people have debt in collections. I wonder though what percentage of that is people who don't even realize it.

Probably not uncommon for medical bills - I know I've had collections threatened before I even received the bill for some dental procedures.

[SwordGuy]

I went into collections because a medical lab billed the wrong insurance 3 times in a row, despite my giving them the correct info all 3 times..

I refused to pay because our agreement was "They will file with my insurance and I will pay what my insurance doesn't pay."

They didn't so I didn't.

[antarestar]

Wow.

I was going to call it out as a horrible clickbaity article but it's from CNN, so I guess it's really sad that 1/3 people have debt in collections. I wonder though what percentage of that is people who don't even realize it.

I was one of those people. I had a $43 medical bill go to collections. I received 1 bill for it, thought I paid it, and never heard anything from them again. The only way I found out about it was when I applied for a HELOC.
I never received a phone call or a letter or anything from the collections company or from the medical facility who sent it to collections (other than that 1 bill that I could have sworn I paid but I couldn't find a canceled check so I guess I didn't).

[MrMoogle]

Wow.

I was going to call it out as a horrible clickbaity article but it's from CNN, so I guess it's really sad that 1/3 people have debt in collections. I wonder though what percentage of that is people who don't even realize it.

I was one of those people. I had a $43 medical bill go to collections. I received 1 bill for it, thought I paid it, and never heard anything from them again. The only way I found out about it was when I applied for a HELOC.
I never received a phone call or a letter or anything from the collections company or from the medical facility who sent it to collections (other than that 1 bill that I could have sworn I paid but I couldn't find a canceled check so I guess I didn't).

I've had two debt collectors come after me this year (first time I've ever had one).  The first one was a medical bill, that my insurance miscatagorized.  After a couple bills, I called everyone and fixed it.  3 months later a debt collector is calling me about it.  My medical provider had a +$104 and a -$104 and didn't realize those cancel out.

The other is from Comcast.  When I signed up for internet, instead of giving me one account, they gave me two, and expected me to pay for both.  I called them and straightened it out, but instead of deleting the duplicate account, they just closed it, adding on an early closing fee and what not.  6 months later I get a letter in the mail about it from a debt collector.  A round of calls to Comcast gets it taken care of.

But if I've had two collections, with no fault of my own, I'm not surprised how many people have them.

[Papa Mustache]

I wonder how many people are not clever enough to deal with situations like your hospital bill and Comcast and end up just paying for it or letting it ruin their credit.

I had a medical bill years ago and it did the same thing. I'd get statements that showed I owed this amount and later a different amount and finally nothing at all. It was the hospital and the insurance company negotiating back and forth and I'd get statements every so often. I called the hospital and they told me just to hold off, they would get it sorted out - and they did. 

[StarBright]

One problem tends to lead to at least one more. I absolutely believe the number about how many people have bills in collections because I know how many people have unpaid water bills. It's not as simple as these people just being bad with their money.

The Michigan/Detroit/Flint water thing is really interesting to me. The whole thing is really an awful domino effect. When Flint left the Detroit water system Detroit was forced to majorly raise prices to cover the lost revenue (I believe I read 25% increases in some areas) Now you have some of the highest water rates for some of the poorest people in the country and on top of that excessive reconnect and late fees that put people's bills so far out of reach that it is ridiculous.

[Papa Mustache]

Seems to me that the state or feds ought to take over for a few years and sort the place out and then hold new elections.

[Guava]

One problem tends to lead to at least one more. I absolutely believe the number about how many people have bills in collections because I know how many people have unpaid water bills. It's not as simple as these people just being bad with their money.

The Michigan/Detroit/Flint water thing is really interesting to me. The whole thing is really an awful domino effect. When Flint left the Detroit water system Detroit was forced to majorly raise prices to cover the lost revenue (I believe I read 25% increases in some areas) Now you have some of the highest water rates for some of the poorest people in the country and on top of that excessive reconnect and late fees that put people's bills so far out of reach that it is ridiculous.

I spent some time talking to residents I came across about it and one woman I met at the hospital said her family of 4 had water bills topping $300 each month. When she called to find out why, she was told it's because there are only 6 houses hooked up in her neighborhood. I never quite understood that explanation and encouraged her to call back and keep pressing and check for leaks. She said she was going to stop paying because she needed her medical treatment more than the water.

Seems to me that the state or feds ought to take over for a few years and sort the place out and then hold new elections.

The state has taken over. That's part of he reason the Flint water crisis happened. The state has had control over various parts of Detroit for years but the problems are deeper than the two years the state had to fix it.

[Metric Mouse]

The state has taken over. That's part of he reason the Flint water crisis happened. The state has had control over various parts of Detroit for years but the problems are deeper than the two years the state had to fix it.

Interesting. I'll have to research more about this.

[Guava]

The state has taken over. That's part of he reason the Flint water crisis happened. The state has had control over various parts of Detroit for years but the problems are deeper than the two years the state had to fix it.

Interesting. I'll have to research more about this.

It's called the emergency manager law.  Very controversial in  Michigan.

[zephyr911]

I've had two debt collectors come after me this year (first time I've ever had one).  The first one was a medical bill, that my insurance miscatagorized.  After a couple bills, I called everyone and fixed it.  3 months later a debt collector is calling me about it.  My medical provider had a +$104 and a -$104 and didn't realize those cancel out.

"DAMMIT MOOGLE, I'M A DOCTOR, NOT A MATHEMATICIAN!!!"

The other is from Comcast....

Dude, I have heard so many horror stories from so many different friends about fucked-up Comcast billing that I would be hard pressed to sign up with them, even if they were the only available provider.

[Sibley]

The state has taken over. That's part of he reason the Flint water crisis happened. The state has had control over various parts of Detroit for years but the problems are deeper than the two years the state had to fix it.

Interesting. I'll have to research more about this.

It's called the emergency manager law.  Very controversial in  Michigan.

The Detroit public school system had someone put in charge of it by the State. From what my mom told me (and what I remember), the public fought tooth and nail and ended up tying the guy's hands. So you have one of the worst school systems in the county, that had someone who from what I know is actually good trying to fix it, and the people threw such a fit that they kaboshed the whole thing.

Detroit lost a lot of sympathy from me after that. Yeah, they've got a lot of problems. But I think the biggest issue is the attitude of the people there. Until that's changed, there's only so much you can do. I'm not willing to bend over backwards to help Detroit anymore - not until I see evidence of real, sustained change in the general public.

[infogoon]

Detroit lost a lot of sympathy from me after that. Yeah, they've got a lot of problems. But I think the biggest issue is the attitude of the people there. Until that's changed, there's only so much you can do. I'm not willing to bend over backwards to help Detroit anymore - not until I see evidence of real, sustained change in the general public.

It's tough to get the public on your side when you tell them "you're not allowed to elect your own leaders any more" and treat them like a colonized people rather than citizens.

[Sibley]

Detroit lost a lot of sympathy from me after that. Yeah, they've got a lot of problems. But I think the biggest issue is the attitude of the people there. Until that's changed, there's only so much you can do. I'm not willing to bend over backwards to help Detroit anymore - not until I see evidence of real, sustained change in the general public.

It's tough to get the public on your side when you tell them "you're not allowed to elect your own leaders any more" and treat them like a colonized people rather than citizens.

Oh, I agree. That's why we're a separate country now! But Detroit has been shooting itself in the foot for a long time, in big and small ways. That particular event was just the last straw for me.

[Papa Mustache]

I like to look at the urban decay websites. Its an extension of my interests in history. Once spent a couple of hours looking through one focused on Detroit.

One of those fellows went through a technical college that was closed down. The school actually still had utilities turned on. No heat though and the pipes broke and all that water froze causing all sorts of destruction. Meanwhile in that building or another (I don't recall) there was a computer lab - computers still on, network lights still twinkling. He said they went back a month or two later and someone had taken everything. Either thieves or the gov't relocating everything, they did not know.

The decay of those properties in Detroit was spectacular. Whole campuses and gov't buildings where the lights were switched off, the doors locked and ignored. Of course the thieves got involved in some cases - and were boldly stripping the places of materials and equipment. Some of the pictures showed scavengers stripping the places while these folks were taking pictures for the website. No fear of the police.

[infogoon]

There was an art exhibit here in Buffalo a few years ago that intemingled pictures of the East Side of the city -- a poverty-stricken area with thousands of vacant buildings and a crumbling infrastructure -- with photos from New Orleans in the days following Katrina. Most attendees couldn't tell which was which.

The blight in some of our poor cities is absolutely unbelievable.

[tpnmom]

Unless they showed pictures of the same area of New Orleans from before Katrina that were vastly different, they were just comparing blight  in one city to another. 

When residents were allowed to re-enter the city for the day to gather any belongings we wanted access to for the next month, we drove around and asked ourselves many times "was that like that before or did the storm do that?"  We had only moved there 6 months before, so we weren't completely familiar with all of the areas we drove through that day to get to our apartment. It was sad that the distinction wasn't clear.

[Papa Mustache]

Not to derail the thread but when I listen to politicians making election year promises (to me, usually empty promises) I can't help but think that if we focused on jobs - better than minimum wage jobs - than alot of the nation's problems would fade away.

Seems tantalizingly easy to tweak everything to provide more jobs from my comfy armchair but I guess the big corporate players wouldn't get to pocket as much profit and we know that's not going to happen. Would likely require something similar to socialism and we know that won't happen and long term it tends to have its own problems.

[infogoon]

Not to derail the thread but when I listen to politicians making election year promises (to me, usually empty promises) I can't help but think that if we focused on jobs - better than minimum wage jobs - than alot of the nation's problems would fade away.

Agreed. Most problems have their roots in entrenched poverty, and that can't be eradicated without jobs (or something like a Guaranteed Basic Income, but that's a non-starter at this point in America).

The problem is that the golden age of the 1950s is over, and now we're competing with billions of other people along with fantastic advancements in automation for those jobs rather than just millions of other Americans. Nobody is ever going to get a lifetime of middle-class wages and a pension out of a high school diploma and an assembly line job ever again.

[Papa Mustache]

So if Trump gets elected and when he obviously can't change the state of manufacturing in the world (automation) - how will his (former?) blue collar supporters react? 

What does this do to that portion of our political establishment? Do they accept the situation, become "Tea Party Extreme", or does this continue the fracturing of the party?

[Metric Mouse]

So if Trump gets elected and when he obviously can't change the state of manufacturing in the world (automation) - how will his (former?) blue collar supporters react? 

What does this do to that portion of our political establishment? Do they accept the situation, become "Tea Party Extreme", or does this continue the fracturing of the party?

My guess is they would react similarly to the way the modern progressives did when they found out Barack Obama couldn't change the state of the world (War in the Middle East, Climate Change); cognitive dissonance and disappointment.

[mwulff]

Not to derail the thread but when I listen to politicians making election year promises (to me, usually empty promises) I can't help but think that if we focused on jobs - better than minimum wage jobs - than alot of the nation's problems would fade away.

Seems tantalizingly easy to tweak everything to provide more jobs from my comfy armchair but I guess the big corporate players wouldn't get to pocket as much profit and we know that's not going to happen. Would likely require something similar to socialism and we know that won't happen and long term it tends to have its own problems.

I feel you may have hit the nail on the head. Entrenched poverty is the great killer of modern societies. I believe that the US would benefit greatly from a more Scandinavian system. I'm not saying you should adopt all of our ways but socialized medicine and education does work.

Part of the problem in the US is the way the debate is framed: "Socialism = Communism = bad". But there are many levels of before we hit communism. My home country of Denmark is more realistically known as a "social democracy" state. Which means we share the burden of education, healthcare, social welfare but also have plenty of private companies.

It is a nice balance between not having anybody without medical care and still having companies be able to function and make a nice profit.

And after all is said and done I am pretty sure that even though my taxes are in the 39% area before deductibles I am still paying less than a comparable US family when you include things like healthcare insurance and saving for college.

On the downside some luxury goods are heavily taxed here, cars are taxed with 150% and alcohol, candy, sugar are also taxed quite heavily. As a result we use small cars that are efficient, ride bikes a lot and now that I think of it.. I don't know anybody who owns a pickup truck.

I actually saw a Ford F150 in town the other day and nearly busted my gut laughing at how stupid that huge thing looked and how it served no purpose what so ever here.

[GrumpyPenguin]

I wonder how many people are not clever enough to deal with situations like your hospital bill and Comcast and end up just paying for it or letting it ruin their credit.

I had a medical bill years ago and it did the same thing. I'd get statements that showed I owed this amount and later a different amount and finally nothing at all. It was the hospital and the insurance company negotiating back and forth and I'd get statements every so often. I called the hospital and they told me just to hold off, they would get it sorted out - and they did.

Oh man, one time Comcast decided to just randomly start charging me a modem rental fee for my own modem.  It was one of the reasons I ditched them for Verizon FIOS. After my account closed with a credit they owed me, they withheld the payment to me because they expected me to return my own modem... which was one of the reasons why I left them. It took more than a year and an FCC complaint just to get them to reverse their charges and then pay me what I was owed. It's not just about being clever, it's having stamina and also the willingness to waste your own time out of the "principal of the matter".

[joleran]

Oh man, one time Comcast decided to just randomly start charging me a modem rental fee for my own modem.  It was one of the reasons I ditched them for Verizon FIOS. After my account closed with a credit they owed me, they withheld the payment to me because they expected me to return my own modem... which was one of the reasons why I left them. It took more than a year and an FCC complaint just to get them to reverse their charges and then pay me what I was owed. It's not just about being clever, it's having stamina and also the willingness to waste your own time out of the "principal of the matter".

On the other side of Comcast stupidity, they once wanted me to drive over an hour (or bike all day) to return the modem, and I told them they could pick it up or give me a shipping label.  After going back and forth with it they apparently just removed the fact that I had the modem from their system and they never billed or questioned me about it again.

[Papa Mustache]

Is there some sort of "developmental timeline" that could applied to our society as a whole? Some sort of wide brush that sort of predicts what comes next?

Around here we have older neighborhoods that became working class neighborhoods and then eventually bottomed out and then began to be purchased for a song and renovated. They now represent some of the more expensive neighborhoods as they gentrified. It is a cycle that seems to get repeated enough that it seems predictable.

My whole society model (with many holes in it) would be the wild west, capitalism (no controls), capitalism (with controls), mixed economy (now) and eventually I imagine that it could become a social democracy given enough time as people b/c more educated about topics like these. A sort of economic gentrification of the country as a whole.

[Livingthedream55]

I just got a debt collection bill for a medical bill that was paid. The bill said I was past due and that I owed $0.00 -- but it was still sent by a collections company! I called them and the woman I spoke to didn't even seem to register that it was ludicrous that I would even get such a letter. I know it's an automated process but WTF?

[Metric Mouse]

Is there some sort of "developmental timeline" that could applied to our society as a whole? Some sort of wide brush that sort of predicts what comes next?

Around here we have older neighborhoods that became working class neighborhoods and then eventually bottomed out and then began to be purchased for a song and renovated. They now represent some of the more expensive neighborhoods as they gentrified. It is a cycle that seems to get repeated enough that it seems predictable.

My whole society model (with many holes in it) would be the wild west, capitalism (no controls), capitalism (with controls), mixed economy (now) and eventually I imagine that it could become a social democracy given enough time as people b/c more educated about topics like these. A sort of economic gentrification of the country as a whole.

And then do we bottom out again? Start over at a lower level to work our way up to gentrification yet again?

[Papa Mustache]

Was just curious if there is an economic and social model that describes the process of a society maturing. Some sort of road map.

I don't want to live like a college student my entire life and I don't want to be like those people who are in the red month after month voluntarily b/c of how they spend their money. Everything in moderation.

Gentrification is an interesting topic. I know gentrification is a bad, bad thing especially in HCOL areas. I've lived in those places too. To the folks who can afford to enjoy it - it means more variety. Places to shop, places to eat, etc.

I wonder if the same people that complain about it also support laissez-faire markets.