Archive for February, 2011

Question by stephan.com: Is there any benefit to declaring bankruptcy when you still have credit left?
I’m a freelancer facing a mountain of credit card debt amassed over many years. I own my car and I rent, single/no kids, and have no assets worth mentioning. I’m trying to pay everything back, but times are lean. I would prefer not to declare bankruptcy primarily on moral grounds, but I looked into it today, and it seems that the only benefits have to do with getting creditors off your back and preventing foreclosure.

I don’t have any creditors on my back yet, and I have nothing to foreclose on. It’s been difficult sometimes – I joke that I spend half my income on rent and half on credit card payments, leaving the other half for everything else. But I’ve made my payments on time with nary a bounced check, and I still have several thousand dollars of available credit left, enough to carry me a couple more months if I needed it to. If I declared, I’d be out of that mess, but I wouldn’t have any credit cushion and would need to get a regular job.

It seems to me that if I’m resetting everything to zero anyway, my smartest strategy is to continue as I have been, hope things get better, borrow my remaining credit as needed and any more I can get, and when I’m down to the last shreds, fix up my car, upgrade my computers (I develop software – iPhone & Rails), buy new clothes, a TV and furniture to last a while, and blow the last drops on a crazy weekend in Vegas and a single roulette spin. Then just stop making payments, squirrel away some paper cash and money for the lawyer, wait for the creditors to go crazy, and file. Hey, I might even get a good gig and dig myself out with just a couple of dings.

I don’t want to do this – it’s clearly wrong – but it seems like that’s how the system is set up.

Am I understanding this incorrectly? Is there any reason to declare bankruptcy preemptively? Are there any other options available?

I really just want to pay it all back.

Best answer:

Answer by zorathruster
If I thought bankers weren’t the lowest form of life on the planet, I’d look down on your plan. But the bankers now, after awarding themselves multimillion dollar bonuses for screwing the whole system, have no sympathy from me. Go get em tiger. Remember, gold coins hold their value and considering they can be held as jewelry and easily cashed in later.

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Question by Sarr: Interesting math problem – gambling statistics?
You walk into a casino with 00 in your pocket. Your game strategy is to maximize the probability of a win. A win is defined
as an event in which you leave the casino with more money than you came in with. Your tactics is to always bet on ”black” in roulette, which has 1/2 probability of success. Once the wheel is spun, and the ball falls on ”black”, you get back twice the money you bet; otherwise you get back zero. Your tactics is ”bet doubling”: you double your previous bet after each loss. The minimum allowed bet is , maximum ,000. You have made up your mind to leave immediately in case of a win (according to the definition above). You also must leave if it becomes clear you
can not win.
Question 1: What is the probability of loss (”loss” = ”not win”) in the above strategy?
Question 2: If such loss occurs, how much money will still be left in your pocket as you leave?

Okay, the pattern follows 2^(n-1), where n = bet number

n – bet amount (assuming all losses)
1 1
2 2
3 4
4 8
5 16
6 32
7 64
8 128
9 256
10 512

When you sum up your bets, you can only get to the 9th one, totaling 511 dollar loss, so you have 489 left and can’t make your next bet.

So what is the probability of a loss?

Thanks for your help.

Best answer:

Answer by Simon L
The probability of loss is (1/2)^9, or 1/256.
If this occurs, you will be left with 9.

This strategy of bet doubling is known as the Martingale and has been widely proven unsuccessful due to betting limits.

Technically, in the context of roulette your statement that the probability of getting black is 1/2 is not true. The 00 makes a big difference, and swings the game in favour of the house. This 00 is why there is no such thing as a Roulette “system”, a strategy that will guarantee gains.

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Question by henry_o01: How did YOU do it when you played???
If you’ve ever played Roulette and won a lot of money tell me how you did it. I actually spend 0 out of my own money and won about 00 dollars and got greedy and walked out with 00. I think that to anyone that’s preety good since I came up 00. The way I did it was, I only placed bets on red or black. I was doing 0 bets, about three times I place bets of 0, it was a lot of fun and RISKY. That was my strategy, red or black. How did you win your money and what was your strategy??

Best answer:

Answer by Vegas Matt
I don’t really play roulette, but I was at a casino playing blackjack a few months back and was watching some guy play roulette at the table next to us. He was so drunk he could barely stand up, and was playing stacks of black chips on 00. He hit it 3 or 4 times in less than an hour and walked out at least ,000 ahead.

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