Wipe slate clean with debt amnesty

ninky_2

yes, the rot is deep. so the solutions need to be to.

i know i probably sound crazy and my suggestions don't really sit well next to the sometimes frankly petty-mindedness of internet forums. but the system has to change.

the problem with debt is it hides poverty. we like to think we live in a rich country but when we face the reality of just how much spending power has been fueled by credit we have to reassess this.

the child in india picking over the rubbish for food is undeniably poor. they have nothing. the person with a car paid for by credit may look rich. in real terms they are actually poor because really they have less than nothing. they owe their future life in terms of projected future earnings that are not actually guaranteed - for none of us can know what the future holds.

this country is still in denial of this reality of poverty because it goes against what most assume.

unfortunately i fear it is going to get ugly. the only hope is we support each other and try to come up with a better system. throwing blame and grabbing what you can for yourself is not going to help.

bendix

ninky wrote: »

the problem with debt is it hides poverty. we like to think we live in a rich country but when we face the reality of just how much spending power has been fueled by credit we have to reassess this.

the child in india picking over the rubbish for food is undeniably poor. they have nothing. the person with a car paid for by credit may look rich. in real terms they are actually poor because really they have less than nothing. they owe their future life in terms of projected future earnings that are not actually guaranteed - for none of us can know what the future holds.

this country is still in denial of this reality of poverty because it goes against what most assume.
.

It's not often I agree with you, but on this you're spot on and it's been my mantra for ages. We have been kidding ourselves for too long, pretending we are rich when all we are is hocked to our eyeballs.

However, our philosophical difference is this. You apportion most blame onto external forces - society, the lenders, the system etc. I prefer to put the blame firmly on individuals who lack the self-perception and discipline to not borrow to excess, and to live within their means.

To then advocate wiping the slate clean to those irresponsible enough to get into trouble - to effectively reward them for their profligacy - is just a step too far in my book.

A caveat . . . it was extremely irresponsible of banks to loan such large sums to an illegal immigrant (and I base my statement on the assumption they KNEW that to be the case and that OH didnt mislead them in any way). How the world has changed. I'm a UK citizen recently returned to the UK, I have a six figure salary, an impeccable credit history and a record of saving 50%+ plus of my income for years, and yet I've just been turned down for a credit card. Frustrating as hell.

ninky_2

bendix wrote: »

I prefer to put the blame firmly on individuals who lack the self-perception and discipline to not borrow to excess, and to live within their means.

Yes, let's look at those what these "means" are for many. Someone on the current minimum wage working the EU maximum working week of 48hrs earns £275.05 - a take home wage of £224.54 a week.

In London a basic room in a shared house in a cheaper area costs around £100 a week (some lucky people may find cheaper options but £100 is typical). This will put you in zone three. Most jobs are in zone 1. A travelcard will cost a little over £30 a week. £20 is for bills. £50 is for food. This leaves you with £24.54 a week to buy clothes, run a car, have a mobile phone, have any sort of social life or the occasional drink etc. etc. Should you be unlucky to get a parking ticket (and even with beady eyes on every parking sign it's easy to accidentaly get these in London) you will automatically be in debt.

Until we have a country in which everyone has a guaranteed roof over their head (not a property rented off the bank or a private landlord) and enough income to meet their basic needs and probably their quality needs as well, we won't be able to say we live in a rich country.

I agree people should take personal responsibility. But to live to their means they also need the means to live. And ideally, to live well.

ninky_2

bendix wrote: »

A caveat . . . it was extremely irresponsible of banks to loan such large sums to an illegal immigrant (and I base my statement on the assumption they KNEW that to be the case and that OH didnt mislead them in any way).

I asked them about the immigration status and they said they weren't interested in this and said that it would not have been a criteria for lending. OH didn't lie. I think it started with a smaller loan (3k). As the payments on this were kept up for a while (it's amazing how you can pay back a loan with the actual money from the loan for a while...) he was then actually PHONED by someone from the bank to consolidate this into a larger loan (18K). The same person made the appointment on the phone and filled in the loan application in the branch. The original paperwork from this was not available as they said they had had to destroy a lot of paperwork from the time due to a rat infestation. I don't believe this for a minute. I suspect someone got a lot of bonuses for getting new loans that year.

The (new) manager in the branch actually said to me the bank would probably come to an arrangement as they wouldn't want me going to the FSA.

tomterm8

bendix wrote: »

However, our philosophical difference is this. You apportion most blame onto external forces - society, the lenders, the system etc. I prefer to put the blame firmly on individuals who lack the self-perception and discipline to not borrow to excess, and to live within their means.
.

I guess my personal problem with your philosophy is that it assumes equality of arms. That is, it assumes that a debtor is equally as capable of assessing his future earnings as a creditor.

Such an assumption was a fair one twenty years ago.

As a student, oh, four or five years ago I worked as part of my research on a baysian neural network using several filtering techniques, using real customer data similar - but not as detailed - to that available to the real research departments for banks. my results were that, given the data, I was able to predict future default with better than 10% higher accuracy than experienced managers in the bank. I didn't have anything like the research budget of the big clearing banks, who certainly used much better techniques than the one I used in my research.

There is a reason banks have moved over to computerised credit checking, and the reason is that it can assess peoples likelyhood of default much more accuratly than humans can. I will say that I personally believe that banks often ignored the results of the assessment - I've seen several cases where people who were rejected by the computer got loans. My personal opinion is that the reason these people got loans were that banks farmed off the loans via securitisation to dupes, and made a profit regardless of whether they defaulted.

bendix

I'm not sure where you're coming from. The efficacy of lenders' controls is irrelevant and would be redundant IF the borrower exercised some personal judgement. He or she is far better able to know his or her repayment power, and i simply do not accept that someone else is better able to judge that than oneself.

I'm not sure where future earnings come into it. The most expensive time of a long-term debt is at the beginning. After time it becomes cheaper to repay because of inflation and increased earnings.

Surely a bit of self-awareness, commonsense and discipline would work? I hate to harp onto ninky's OH case (and I genuinely mean him no harm), but surely someone with the wherewithall to come to the UK as an illegal immigrant (and let's face it . .that requires energy, drive, ambition and courage) has the self-awareness to know that borrowing £18000 with no tangible means of paying it back is a recipe for personal disaster.

Here's the harsh reality. Such instances are either grossly irresponsible or something more sinister.

So which is it?

tomterm8

bendix wrote: »

I'm not sure where you're coming from. The efficacy of lenders' controls is irrelevant and would be redundant IF the borrower exercised some personal judgement. He or she is far better able to know his or her repayment power, and i simply do not accept that someone else is better able to judge that than oneself.

That is the point. The research I did leads me to believe that in general, customers are much less capable of knowing their future repayment power than banks.

bendix wrote: »

I'm not sure where future earnings come into it.

When you lend someone money, an assessment of whether they will be able to repay it is normally made on both sides. If you assume good will, then what you (as a bank) are doing is assessing whether their future earnings will be large enough to repay the loan.

Of course, the other side of the equation if it's a secured loan is what the future value of the security will be. I think banks have been very poor at this side of things.

But, in terms of knowing whether a borrower will default, the banks technology is much better than a human.

bendix wrote: »

The most expensive time of a long-term debt is at the beginning. After time it becomes cheaper to repay because of inflation and increased earnings.

Default normally happens because someones earnings fall short of their expectations, due (e.g.) to sickness, divorce, or unemployment.

bendix wrote: »

Surely a bit of self-awareness, commonsense and discipline would work?

People are generally very bad at predicting the future, and people generally think they are better at predicting the future than they actually are. It's the same as people going to tarot readers; the tarot reader is generally considered very accurate even though their actual success rate at meaningful predictions is generally very poor.

bendix wrote: »

I hate to harp onto ninky's OH case (and I genuinely mean him no harm), but surely someone with the wherewithall to come to the UK as an illegal immigrant (and let's face it . .that requires energy, drive, ambition and courage) has the self-awareness to know that borrowing £18000 with no tangible means of paying it back is a recipe for personal disaster.

Here's the harsh reality. Such instances are either grossly irresponsible or something more sinister.

So which is it?

It's very likely to be fraud both by Ninky's friend, but also by the bank. The salespeople very likely knew ninky's friend couldn't afford it, I bet that if Ninky's friend put truthful data into the computer the computer said "No", and if she put untruthful data into the forms it would have been easy for the bank to know she lied. And yet that decision was overruled.

Banks these days sell debt on to third parties. There were a large number of cases where loans were made where anyone knew they were bad loans, because the bank got a commission on the debt regardless of whether it defaulted or not.

chopperharris

We all hear all to often that in this case the poor woman always ends up carrying the can for the OH running up debts then going back home.

Just how anyone could lend such money without a fraud being committed by the debtor or creditor is beyond me.Especially so if the debtor was an immigrant , alarm bells should have went off , garuntors if it was me lending would have to be applied as a matter of course....but hey I am always saying im careful with my money and only used credit for needs.

Sorry ninky but your plight is harsh , not your OH.but theres a couple of mistakes in there that are edging on dodgy.You mentioned that the original loan was paid from itself , I find that questionable unless increasing credit was the goal.

You also mention that the bank phoned to offer credit , I highly doubt that , sure you might have been told that by oh....but I doubt that a bank would have done this at all.

Sounds like another "my boyfriend ran up debt and went back home and now I have to pay it" story in the tabloids.

ninky_2

chopperharris wrote: »

Sounds like another "my boyfriend ran up debt and went back home and now I have to pay it" story in the tabloids.

So having dismissed Bendix assumption that I'm a self-centred hypocritical commie eager to write off debts for my own personal gain, we're now onto the story that I'm a poor helpless victim hoodwinked by a foreign loverat intent on nothing other than parting me from my hard-earned cash.

ChopperHarris, the debt is still in my husband's name and is in no way linked to my credit rating. Since his immigration status has been legalised (3 years ago) and he has been more able to find employment he has been paying for it himself. We have been married almost 6 years and so far no signs of him doing a runner. Instead, I find myself married to someone loyal, devoted, always mindful of my needs, willing to cook and clean, not interested in football, going down the pub or looking at other women and open to new ideas and experiences. It's a shame the same can't be said for everyone married to the homegrown variety.

It seems that often when people are presented with facts that do not fit into their world view the mind goes into overdrive inventing narratives to make it all fit neatly back together again.

It's best not to read those tabloids. They're full of s**t.

chopperharris

ninky wrote: »

So having dismissed Bendix assumption that I'm a self-centred hypocritical commie eager to write off debts for my own personal gain, we're now onto the story that I'm a poor helpless victim hoodwinked by a foreign loverat intent on nothing other than parting me from my hard-earned cash.

ChopperHarris, the debt is still in my husband's name and is in no way linked to my credit rating. Since his immigration status has been legalised (3 years ago) and he has been more able to find employment he has been paying for it himself. We have been married almost 6 years and so far no signs of him doing a runner. Instead, I find myself married to someone loyal, devoted, always mindful of my needs, willing to cook and clean, not interested in football, going down the pub or looking at other women and open to new ideas and experiences. It's a shame the same can't be said for everyone married to the homegrown variety.

It seems that often when people are presented with facts that do not fit into their world view the mind goes into overdrive inventing narratives to make it all fit neatly back together again.

It's best not to read those tabloids. They're full of s**t.

Tabloids are full of it , I know , they perpetuate sterotypes for a reason...if it didnt happen it wouldnt be reported.

It even happened to the mother of the current president of america , an educated woman , she was still used in the same way while her husband had a family back home...if thats not the biggest highlight of the happening then I dont know what is.

If your representing the facts then they are somewhat iffy.In that a bank phoning someone at home to offer credit on spec I dont think is allowed , and that the original smaller amount paid itself for a while.....so either credit wasnt needed in the first place or it was to create a good credit rating for more debt.This is what anyone reading would rightly think.

If you say about inventing narratives then it goes both ways....especially when the idea of yours on a financial utopia would solve your problem...or as you say "fit it neatly back together".I havent invented a thing , I only read the material given to me by you and that the corresponding simmilarities are not suprisings.

The debt of the spouse is a combined debt , you get married you take on that persons responsibility as your own even if its there before it.Imo it goes that way for child support too but thats neither here nor there in your case.

In part you did some of your bit , you negotiated a new payment structure , and in no doubt probably have , or still do , pay some of the debt back.

You obviously resent the fact that theres debt there not of your making , and I would too , but it still has to be repaid.You think the world should change to sort out your problem , and sadly it doesnt happen like that.

If there was a problem in that the credit laws were broken then see a lawyer , you might end up with no debt at all ..... or sadly find out the hard way something else entirely.

The funny thing in common with these stories in the tabloids , they were all super great husbands that ran up the debt.Friends nearly always smelled a rat , as did family , and to the bitter end they faught hard for them.

And unless I am wrong trying to change the whole world to a financial utopian dream of yours because of them is perhaps the biggest fight of all.