Wipe slate clean with debt amnesty

lostinrates

ninky wrote: »

I think wiping of the debts of those that genuinely have no assets yet have a lot of debt is a good idea. It's slowly what is happening anyway through IVA / bankruptcy as we realise financial institutions have given debt to those with no chance of paying it off or have basically had to sell their entire future working life to clear it.

There will not be a "run on the banks" as many fear, because unlike the last time this happened, the vast majority of account holders don't have anything to draw out. When the run on the banks happened, bank accounts were only available to the wealthy. This time the banks have emptied the coffers through their own stupidity and greed.

But, as you say, we have a mechanism to deal with this, through bankruptcy. If someone who has got into a critical unsecured debt situation is simply lifted from it, we would need (I believe we already do)a mechanism to stop this being a repeat situation.

drc

I don't agree with it. People need to start taking resonsibility for their actions and not expecting someone else to bail them out every time. If you can't afford it, don't buy it, it's as simple as that. Such a plan would only confirm to those that are responsible that there is no point in saving and being prudent and then we would have even more problems as savers would spend all their savings so that they can have all the goodies that come with having no responsibility and no money.

Pobby

iolanthe07 wrote: »

It hardly rewards thrift and responsibility, either.

This government rewarding thrift and responsibility? Ya `aving a bubble!

lostinrates

iolanthe07 wrote: »

It hardly rewards thrift and responsibility, either.

Yes, agreed, and my gripe over many recnet occurances. But perhaps my view is changing. I'm slowly becoming of a mind that rewarding good behaviour is not the key aim, but vrather to do the best by the majority- and its not always the same. Its a galling concept for those of us outside this confine though

Dan:_4

Graham_Devon wrote: »

I doubt personal debt would include houses.

In my mind, personal debt means personal loans, credit cards, overdrafts etc, maybe even car loans.

But I'd suggest it means unsecured debts. Can't see it happening myself. It would seriously punch everyone very hard who had done everything they could to pay off their debts instead of just going bankrupt etc.

Sorry I meant unsecured debt, not houses.

The point I was trying to make that if all unsecured debt was written-off, what state would the banks be left in? Probarly not able to lend even a bean on future mortgages.

Unless the Government started up a national bank, and everyone has no choice but to bank with them for current accounts, savings and mortgages.

Dan:_4

iolanthe07 wrote: »

It hardly rewards thrift and responsibility, either.

There is never a reward for this. If this plan ever comes into force (it won't, but if it does) quickly apply for as much borrowings as you can!

Dan:_4

drc wrote: »

I don't agree with it. People need to start taking resonsibility for their actions and not expecting someone else to bail them out every time. If you can't afford it, don't buy it, it's as simple as that. Such a plan would only confirm to those that are responsible that there is no point in saving and being prudent and then we would have even more problems as savers would spend all their savings so that they can have all the goodies that come with having no responsibility and no money.

I think its too late now

ninky_2

lostinrates wrote: »

But, as you say, we have a mechanism to deal with this, through bankruptcy. If someone who has got into a critical unsecured debt situation is simply lifted from it, we would need (I believe we already do)a mechanism to stop this being a repeat situation.

Yes, we need a HUGE increase in responsibility of lenders. In fact, much less lending generally.

Some years ago before we met my OH was actually telephoned by Lloyd's TSB and offered an £18, 000 loan. He was a desperate illegal immigrant at the time and accepted it. His English was very limited at the time and he didn't understand the terms and conditions let alone what PPI was. When I came on the scene and asked the bank manager to show me the paperwork for this loan they told me all paperwork from this time had been destroyed due to a "rat infestation". I got them to agree to freezing the interest and reducing the payments to £50 a month (they didn't want me to go to the FSA clearly).

In another instance, when I was having trouble getting a mortgage due to self-employed status I was introduced to a mortgage broker who told me he could get me a £1 million mortgage if I wanted it via self-certification. Needless to say, I went elsewhere.

When financial institutions have been running like this we need to take stock and make BIG fundamental changes.

Just because people have taken out debt they can't afford doesn't necessarily make them irresponsible. They could just be financially vulnerable and ignorant.

lostinrates

ninky wrote: »

Just because people have taken out debt they can't afford doesn't necessarily make them irresponsible. They could just be financially vulnerable and ignorant.

I would with no disrespect intended suggest that taking a loan that you don't understand the terms of legally or otherwise, without seeking help from someone who can help you understand is irresponsible.

Dan:_4

I think ninky may have a point. There was a time when you couldn't pop in a bank to pay a cheque without getting hassled to take out a loan or credit card.

Everytime you logged into your online banking there would be a message "Your Pre-Approved for 25K"

For some, all this in your face, is just too tempting.

The banks should take some of the responsability.