Wipe slate clean with debt amnesty

iolanthe07

unsecured debt would be written off

This would be grossly unfair to those who live prudent modest lives, within their means.

ukcarper

I have a very good credit score and have never own a new car so could somone tell me when this is coming in so I can go and buy a new BMW on credit and won’t have to pay more than a couple of instalments.

chewmylegoff

chopperharris wrote: »

The reason why plasmas are used to define credit .... because they are never saved for....they are almost always bought on credit.

10/10 for hyperbole. plasma/lcd tvs aren't even particularly expensive these days. the days when a basic model cost £2k are long gone. you can get a 32inch lcd for £300.

a much better example of use of credit to buy things that people can't really afford (aside from houses of course) is cars.

JP45

PasturesNew wrote: »

To make such a ridiculous suggestion, she must be teeting on the brink of bankruptcy herself, or somebody close to her is.

Why should people who over-stretched themselves to get more, more, more end up getting it all for free? That'd just not happen. There'd be anarchy and random burnings.

I agree. The suggestion is barking mad and a complete non-starter.

Here's another extract from the letter:

Rather than heap the blame on those in debt, let us instead remember that if it were not for people’s willingness to go into debt we would never have had a boom in the first place.

Absolutely right. We would not have had the boom, but nor would we have had the subsequent bust.

How on earth can she not see that?

AverageJoe_4

chopperharris wrote: »

I know of the dispersion of wealth , I know that banks sell credit , but you its all about choice....choice of the end user , ie customer as to whether they need or can afford it....they arent forced to take it , but repaying it should be.

There is no excuse I havent heard thats not tantamount to "its not my fault" , and thats where the real problem lies.

There is those that genuinely get into problems with credit in order to actually live , and they are very few.But if the rest cut back on everything else then they would not need credit , this is why folk moan with the plasma argument.

You mentioned "hour of need" , I think you should perhaps define what a need is.IF a hol is on credit then its not a need , any comsumer electrical item is luxury , as is a brand new car...after a mortgage these are the biggest use of consumer credit.

If you know that your car/home insurance is coming every year and dont save for it next year and thus pay more for the credit then its just stupid if cancelling the internet , take away , weekly night out , or sky will pay for it.

I think the nation , and the "civilised" world needed a cold hard shock and this credit crisis is exactly that.If we live on other peoples money for anything other than need then its a luxury , even then one persons need is anothers luxury.

Overall I am not against credit when it is repaid.In fact I respect it and thats how , even though it may not look it here , I am actually defending credit.

You right though emmotions can make us buy , but theres similar emotions to those that are as equally important that tell us not to , one of them overules the rest ... its called fear.If we didnt have fear of retribution for our actions then we would just steal the money , but then again we could always ask for the slate to be wiped clean instead of getting jailed for it.

I agree to a point - however you say fear is the emotion which overules such decisions - hmm, if fear is present.

Banks are comfy warm places to sit and the staff are so friendly and smily etc... some even offer you coffee whilst discussing finances - no fear here. Its all irradicated.. advertising is stong and dangerous and its not as easy as saying "i dont need it" - it gets ppl into thinking that they can do with it, and that they do need it when they dont, just like people dont need cigarettes or herion but still, you know the answers there...

I was told recenty by the FOS that signing an agreement in the banks branch may not give you any cooling off period. I didnt know that and I bet most people dont.

If a study could be done of peoples endorphine levels at the time of loan discussion through to agreements, I think it would be interesting to see if people are actually making rational choices. I am a level headed guy, but I know I can be easily sold too - and so are 95% of the popultion in one way or another. Banks are high street commercial giants just like Tesco, M&S and all the others wanting a piece of your paycheck.

AJ

ukcarper

Some one I know was asked to say he was earning more than he was so he could get a Mortgage he didn't and lost the house. Not all people fall into the trap of taking out to much credit so why should they pay for the ones who do?

chopperharris

AverageJoe wrote: »

I agree to a point - however you say fear is the emotion which overules such decisions - hmm, if fear is present.

Banks are comfy warm places to sit and the staff are so friendly and smily etc... some even offer you coffee whilst discussing finances - no fear here. Its all irradicated.. advertising is stong and dangerous and its not as easy as saying "i dont need it" - it gets ppl into thinking that they can do with it, and that they do need it when they dont, just like people dont need cigarettes or herion but still, you know the answers there...

I was told recenty by the FOS that signing an agreement in the banks branch may not give you any cooling off period. I didnt know that and I bet most people dont.

If a study could be done of peoples endorphine levels at the time of loan discussion through to agreements, I think it would be interesting to see if people are actually making rational choices. I am a level headed guy, but I know I can be easily sold too - and so are 95% of the popultion in one way or another. Banks are high street commercial giants just like Tesco, M&S and all the others wanting a piece of your paycheck.

AJ

Sorry your wrong , banks dont come round to your home and harrass you to take out credit and put a gun at your head until you do ....the person has to choose to take it....it is that easy to say no.Your perhaps are right on bank cooling off period , I coudlnt possibly know as I only take credit for needs.

Of course they sit and give you tea and coffee , if they want my business they bloody better treat me special to get it....and to keep it.

The same thing can be said about any criminal ie the endorphines , and of any crime commited in that a bio chemical reaction made them do it...should we wipe their slate clean too?My mate Maddof would like to hear more about this and everyone inside any jail.

My first loan was for an engagement ring , only engaged once , and I am actually still married....but some would say im still paying the true price long after the loan is paid.My next was for my first computer and I still have it.My last one was for my first banger.In each of these loans I had to want them to get them , none could be considered a true need , I asked for them and accepted the rates and conditions.They were all from the same bank I have used since leaving school.When i had a period of unemployment for a year the extra insurance on top paid it .

For those plasma blame hounds out there I have a 50 inch plasma bought new from empire direct for the wifes enjoyment of edutainment , a family luxury paid for with savings and yet doesnt face the open curtains.It was equivelant to about a tenth of my income or a 20th of our combined one last year.Our income this year will be considerably less as a large part of it is based on savings/investments.This year though our Belts will have to be tightened , despite actually doing the right thing with our own money we are still being penalised for being "good" moneysavingexperts.

The price of a consumer item doesnt actually matter , but the ability in affording it sure does.Sure I could have bought a cheaper tv , none at all if I couldnt afford it , or if couldnt pay any one of my bills last year I woudnt have.I only spent a surplus of savings as a treat , which may this year turn out to have been a bad decision if all our economics get worse...but hay at least I not still paying for it plus interest and insurance.

The luxuries of life are all that much sweeter if you "have to" sacrifice some other sugar to get it.

ninky_2

chopperharris wrote: »

Sorry your wrong , banks dont come round to your home and harrass you to take out credit and put a gun at your head until you do ....the person has to choose to take it....it is that easy to say no.

I'm sorry CH but you have been conned. Conned into taking out savings in the same way that others have been conned into taking out loans.

Just as you say borrowers must have known they had to pay back the money, did you not equally know that future drops in interest rates or complete devaluation of the pound could wipe out any real value from your savings? I could easily say to you, as you do to borrowers "it's buyer beware". But I don't. Because I know you thought you were doing the right thing.

You thought you were doing the right thing scrimping and saving and squirreling it away to the banks. Banks who care no more for you than they do for borrowers. Banks who only wanted your money because they could make a profit on it, not because they would actually guarantee you any actual future from it.

You see CH, you are actually a victim of the same economic system as the borrowers. A system that does not care about the quality of life of individuals, it only cares about the profit motive. Rather than throwing blame at each other, or feeling jealous that others have somehow got something for nothing, we need to cooperate to change that system so that we can all have a better quality of life both now and in the future.

dopester

As a saver I don't feel conned at all.

Creditors will prevail over debtors. Financial assets, and all other asset-classes of value, will be selectively repudiated by default, not obliterated by inflation.

The full power of the markets will prevail over Labour's perverse meddling in trying to deny the market to play out as it should.

A concerted attempt by political authorities to override market disciplines and write down debt through inflation would lead, in the extreme, to the disappearance of credit altogether - an outcome that would doom a modern political economy.

In his best-selling book, The Rise and Fall of the Great Powers, Paul Kennedy emphasised the importance of financial stability, "sound money, secure credit, and regular repayment of debt" in producing military success. In one case after another, the leading powers were powers because they were rich. "Success in war depended upon the length of one's purse." First Spain, then the Netherlands, and later England came to dominate much of the world because of their extraordinary financial capacities to wage war.

These nations failed when they reached the limits of their capacities to finance the costs of war. Spain was bankrupted in 1696, when interest on the national debt took a large fraction of national reserves, variously reported as from 40 percent to 66 percent. The result was that Spain was forced to withdraw from wars it could no longer afford.

Dutch finance was strongest in Europe even before the Dutch because military predominant. Dutch capital continued to pay a major role in financing British wars. When Britain allowed its creditworthiness to decline during the time of the American Revolution, the Dutch withdrew their financial support, with unfavourable consequences from the British point of view.

I think too many people wholly underestimate the importance of capital and credit markets. If you deliberately seek to take measures to hurt or wipe out the financial backers you rely on, who you borrow from, which Britain has to, then they are unlikely to trust you in the future. You'd lose access.

You can't have a country with debtors living it up and political authorities wiping away or bailing out all debtors, like big-time over-extended mortgage holders, else it feeds back in hurting capital markets.

The UK will take the path, even whilst painful, of least possible destruction.

If creditors were wiped out, to the benefit of debtors, then what would we be left with? Wouldn't be worth doing business, working to try and get ahead. Access gone to credit markets. Wow - we've got a country of houses and no economy. We'd also be military weakened. And other nations who pursue the sensible course, and take the pain, would move ahead, especially in development of new technologies and stuff - where we'd be outcast and blocked from capital markets.

Also the limit has been breached. House prices at these levels with the old mortgage credit oceans evaporated to a desert.. house prices are way overvalued (imo.) The pillars of the old reality have been bulldozed from underneath, but few seem to yet able to accept everything has changed. There is only so long it can be dragged out.

Younger people with fewer job opportunities, an economy shedding jobs - you can't bail out all debtors - and lock sound money out - sound and intelligent and new money which should take over from all the old business elites failures, and political failures, to restructure and then aim for growth under new conditions.

tomterm8

chopperharris wrote: »

taken from itsabloodyshovelpricecrash.com

The reason that bankruptcy provision exists is that it makes everyone better off in society. By allowing people to put a line in the sand on unpayable debts, it forces creditors to be more responsible in lending. If they fail to lend to people who can't afford to repay, they lose their money. The point is bankruptcy only forces people to realise the loss, and put it on their balance sheet - prior to bankruptcy, the creditor has already lost the money.

The debtor repays what they can repay, but isn't left as an economically crippled unit for the rest of their life. Prior to the bankruptcy provision, there were times when people had to emmigrate in order to rebuild their life. By wiping away unpayable debts, rather than leaving them to grow at 10% a year, bankruptcy allows someone who is probably wiser (certainly more experienced) to slowly rebuild their personal wealth and rehabilitate into someone who will play a full part in our society. Without it, there would in many cases be no motivation to improve your life at all, because every pound earned would go to a creditor of an unpayable debt.

Your post ignores the fact that there are people with such large debts that they will never be able to repay them. They will grow larger than any possible repayment. If you leave them impoverished for the rest of their life, they will always be a drain on society.



I think that in the main, our society has got it right. Bankruptcy shouldn't be a painless process, and there is no reason for a "debt amnesty" that isn't specifically aimed at those that need it. Bankruptcy ought to prevent you obtaining easy credit for many years, but not forever. About the only thing I disagree with is the existance of an upfront fee for bankruptcy. It prevents people in desperate need doing the right thing.