by Richard Prior
Staff Writer
The word is we’re drowning.
Not all of us, exactly. But 96 percent of us are. Drowning in a torrent of debt.
The floodwaters actually have gotten so turbulent that the vast majority of us won’t make it to shore, says Lansing Roy. Our survivors will have to take care of that.
Then their survivors will have to take care of them. And so it goes.
“My idea of retirement,” said Roy, “is not being at the door at Wal-Mart saying, ‘Good morning, Wal-Mart shopper’ or having a paper hat on at McDonald’s saying, ‘Do you want fries with that order?’ at the age of 74. Or bagging groceries at Publix at the age of 76.
“God bless the people that have to do it. I just don’t want to be one of them.”
Roy, an attorney who has specialized in bankruptcy cases since 1969, said business is much better than it ought to be. The firm, on Shadowood Lane, employs 30 people and files 150 cases a month.
“It’s not getting any better,” he said.
There’s plenty of blame to go around for creating so much debt, Roy said.
One reason is a reluctance by vast numbers of people to postpone gratification and take responsibility for their spending decisions. They’re eager to take their place in the rat race so they can learn how to keep up with the Joneses. Or outdo the Joneses.
The other, Roy said, is, “The irresponsible lending practices of the credit card industry have created a $7 billion consumer debt.”
Those practices include opening up the wide world of future debt to a growing number of young — very young — consumers.
“You’ve got Barbie Dolls,” said Roy. “Cool Shoppin’ Barbie. And she’s got her outfit on and her purse in her right hand, and she’s got a MasterCard: ‘Discover the Moment’; ‘Master the World.’
“You’ve got juniors and seniors in high school getting solicitations for credit cards through the mail. You’ve got kids standing in line at college solicited by credit cards.
“You go to the post office today, and you want to buy a 37-cent stamp; they’re instructed to tell you, ‘You understand that you can charge it.’ ”
The situation clearly has gotten out of hand since the first credit card was issued by a Nebraska bank in 1953.
Most young people would be impressed to learn that they will easily make at least a million dollars during their lifetime. Forty years of work at $25,000 a year is not an unreasonable expectation. It would confirm what they’ve been told, that education and hard work will open the gate to that bright and shining home on the hill.
They would be less impressed to find out what’s going to happen to that million and count themselves among the fortunate if they don’t wind up living in an appliance box by the overpass.
“The mortgage companies, the financial arms of the automobile manufacturers, the credit card industry, the finance companies, the insurance companies and the taxing authorities will take 75 cents of every dollar that 96 percent of all Americans make in their lifetime,” said Roy. “That leaves $250,000 to cover all the other things in life.
“And that’s why, today, everybody’s broke.”
In February 2001, Roy and Tom Abbott, who works at the firm, decided to start a clinic to help clients break out of the habits that brought them to a bankruptcy attorney in the first place.
They meet on Tuesday nights from 7 to 8:15. Four meetings complete the series. Each month, Roy and Abbott start the series again.
They show their clients how they wound up “part of the 96-percenters and teach them what the other 4 percent do right,” Roy said.
Clients also learn how to clean up their credit bureau reports, how to protect themselves under the Fair Credit Reporting Act, and how to refinance mortgages after bankruptcy.
And they learn about “rollups,” a process to accelerate getting out of debt.
Two months after that clinic started, the 4 Percent Club was formed. Some 20 to 25 people attend those sessions the second Saturday of each month from 9-11 a.m.
“They’ve learned they can do together what they can’t do alone,” Roy said. “We apply some of the principles from the 12-step recovery program. Like do the next right thing. And the principle that, if they’re willing to take suggestions and advice and become accountable, they can, in fact, learn a new way to handle finances.”
Roy is thinking about modifying the program and suggesting the superintendents of schools in Duval and Clay counties make it an optional course for high school seniors.
“None of the kids have been taught the dangers associated with making minimum payments on credit cards,” said Roy. “None of them have been taught about what percentage of their income needs to go for housing, transportation, discretionary spending, clothing, electricity, water, cable, maintenance and upkeep on their cars, maintenance and upkeep on their houses . . .
“They haven’t got a clue concerning any of this, and it’s not being taught.”