debtors going without food.

Fire_Fox

Generali wrote: »

I think that PN's particular personal quirks mean that she struggles to see shades of grey so that may be problematical.

Further I think (and certainly hope) that PN lives a happy and fulfilled life and that she has made a series of decisions that will leave her happy and content.

Her personal quirks tend to have me in agreement with her POV on most issues - Pastures comes across (to me anyway) as an informed realist rather than a pessimist.

lostinrates

Fire_Fox wrote: »

Her personal quirks tend to have me in agreement with her POV on most issues - Pastures comes across (to me anyway) as an informed realist rather than a pessimist.

dh contantly worries about me talking to nutters on t'internet. its people like Pastures (and many others, who I'm sure no who they are ;):D) that make me stick my tongue out at him and be internet nutter myself.

MrCarrot

While illness and unemployment is a worry for all of us, I cannot sympathise too much.

As others have pointed out - what does it mean to go without food? Does it mean people have their meal but can't have chocolate cake afterwards? Does it mean they have to buy Tesco value instead of brands? Or are they literally starving to death (I doubt it)?

Aside from that, what do people expect when they get themselves into debt? If you personally let someone borrow £10k off you and then wanted it back, would you concern yourself with whether the person in question had a job or was ill? Would you feel sorry for them and just write your £10k off as a loss? Unlikely.

I run a business and if my debtors don't pay me, then I am the one going without food. I know it's not quite the same for bigger companies such as CC companies and banks, but the principal is the same.

Harry_Powell

Isn't a lot of debt comprised of interest payments, rather than the debt itself? I know it's an extreme case but I recall a story where a woman ended up paying something like £12k in interest payments for a £1k loan, admittedly it was to a loan shark.

Even with high street banks, after they have aded on interest payments at +16%, a few fines for late payments, admin charges for god knows what, the original debt is dwarfed.

It's too simplistic to just dismiss people as spendthrifts and say that they brought it on themselves.

MrCarrot

Harry_Powell wrote: »

Isn't a lot of debt comprised of interest payments, rather than the debt itself? I know it's an extreme case but I recall a story where a woman ended up paying something like £12k in interest payments for a £1k loan, admittedly it was to a loan shark.

Even with high street banks, after they have aded on interest payments at +16%, a few fines for late payments, admin charges for god knows what, the original debt is dwarfed.

It's too simplistic to just dismiss people as spendthrifts and say that they brought it on themselves.

That's true, but people can see how much the loan is, see what the interest rate is and calculate the cost over a certain period. I am not sure about credit cards and loans, but with mortgages it actually tells you the total that you're going to end up paying back over X number of years. If people can't calculate this information for themselves, then they shouldn't be borrowing the money in the first place.

But people don't take any of this into account. Lots of people just think, "Yey free money, I'll worry about paying it back some other day."

I admit not everyone is like that, but lots of people are. Then when they can't pay the money back due to their own stupidity they feel hard done by.

abaxas

MrCarrot wrote: »

Then when they can't pay the money back due to their own stupidity they feel hard done by.

Excellent point,

The issue is that others will have to pay it back for them. Why should someone pay for someone else's jolly?

lemonjelly

Harry_Powell wrote: »

Isn't a lot of debt comprised of interest payments, rather than the debt itself? I know it's an extreme case but I recall a story where a woman ended up paying something like £12k in interest payments for a £1k loan, admittedly it was to a loan shark.

Even with high street banks, after they have aded on interest payments at +16%, a few fines for late payments, admin charges for god knows what, the original debt is dwarfed.

It's too simplistic to just dismiss people as spendthrifts and say that they brought it on themselves.

Absolutely, well put. Interest & other such charges cause a lot of debt to spiral, from something controllable, to something out of control.

MrCarrot wrote: »

While illness and unemployment is a worry for all of us, I cannot sympathise too much.

As others have pointed out - what does it mean to go without food? Does it mean people have their meal but can't have chocolate cake afterwards? Does it mean they have to buy Tesco value instead of brands? Or are they literally starving to death (I doubt it)?

Aside from that, what do people expect when they get themselves into debt? If you personally let someone borrow £10k off you and then wanted it back, would you concern yourself with whether the person in question had a job or was ill? Would you feel sorry for them and just write your £10k off as a loss? Unlikely.

I run a business and if my debtors don't pay me, then I am the one going without food. I know it's not quite the same for bigger companies such as CC companies and banks, but the principal is the same.

I understand your perspective here. However, I would assume that you, as a responsible business person, take careful consideration as to who you accept as a creditor, & who you refuse credit to.

Being a creditor/debtor is a relationship. It is a 2 way process. There lies responsibility on both sides. There are many who would argue that the levels of lending, & the practices used to "promote" or "encourage" people to take on additional loans, cards etc was at best questionable, or at worst, negligent.

You are aware of the implications non-payment would have on your business, so you consider the risk & implications of extending credit with great care.

I would put forward the proposition that due care hasn't necessarily been taken by lenders in some cases.

Harry_Powell

MrCarrot wrote: »

That's true, but people can see how much the loan is, see what the interest rate is and calculate the cost over a certain period. I am not sure about credit cards and loans, but with mortgages it actually tells you the total that you're going to end up paying back over X number of years. If people can't calculate this information for themselves, then they shouldn't be borrowing the money in the first place.

But people don't take any of this into account. Lots of people just think, "Yey free money, I'll worry about paying it back some other day."

I admit not everyone is like that, but lots of people are. Then when they can't pay the money back due to their own stupidity they feel hard done by.

Perhaps they fully expected to be able to repay the loan but then life got in the way? Reduced hours, reduced overtime, job loss, sickness, etc. There are a lot of issues that can get in the way.

I've no axe to grind either way with this issue, I've been brought up not to use credit, except of course a mortgage, but I'm not so 'holier than thou' that I can't imagine a scenario where I could get into serious financial difficulties due to circumstances out of my control. As I said, I don't believe that everyone in debt got there because they overreached in order to buy the ubiquitous plasma tv or because they wanted to fund a hedonistic lifestyle.

I'd imagine the majority simply fell on hard times and events overtook them faster than they could respond financially. It's all very well to say that people should cut their cloth to suit their circumstances, but often it takes time to do the trimming (such as selling a house or even moving to a cheaper rented property is difficult if you're still in the assured tenancy period). By the time some people have done the necessary trimming, they're in a world of debt and the interest charges are such that most of their disposible income is taken just servicing the debt rather than paying down the capital.

fabforty

lemonjelly wrote: »

Lights fuse & steps back.....

Apparently people who are in debt are going without food, fuel or heating in order to pay off creditors. http://news.bbc.co.uk/1/hi/scotland/8355815.stm

Do you agree? Is this what is happening?

I'll await commenting on this until tomorrow. I'll let you lot have fun with it for now...

Articles such as this are so predictable in the way they focus on the usual categories - lone parents, the unemployed, the elderly. Whereas those who also struggle but fall through the cracks because they do not qualify for any form of help, are forgotten. I am referring to two parent families, singles or couples without children, and who work earning above the minimum wage but who are not particularly well paid. I know of people in those categories who on occasion have gone without food to pay bills or to provide for their kids. I remember leaving university and having two part-time jobs which barely covered my rent and bills. I lived off toast, pasta and cup-a-soup for two weeks. My neighbour and his wife both work full-time. This week both he and his wife are walking to and from work (1hour each way) because they can't afford the £40 travel cost. They earn just over the WTC threshold, and with 4 children (2 x twins 14 y.o. and 2 y.o.), mortgage, bills, childcare costs, extensive dental treatment for husband,school meals etc etc, they are pretty much broke. Unfortunately, there is no help available for people like them - they are simply not a priority.

MrCarrot

lemonjelly wrote: »

Absolutely, well put. Interest & other such charges cause a lot of debt to spiral, from something controllable, to something out of control.



I understand your perspective here. However, I would assume that you, as a responsible business person, take careful consideration as to who you accept as a creditor, & who you refuse credit to.

Being a creditor/debtor is a relationship. It is a 2 way process. There lies responsibility on both sides. There are many who would argue that the levels of lending, & the practices used to "promote" or "encourage" people to take on additional loans, cards etc was at best questionable, or at worst, negligent.

You are aware of the implications non-payment would have on your business, so you consider the risk & implications of extending credit with great care.

I would put forward the proposition that due care hasn't necessarily been taken by lenders in some cases.

Yes I would agree with that. I am sure the banks are in a state of panic at the moment and although I earn a decent amount even I have struggled to get mortgages recently and at one point I had my Barclay Card withdrawn, which was more amusing than anything seeing as I didn't need it.

However it's only been like that in the last 12 months, so I don't have too much sympathy with loan and credit companies who have dished out debt left right and centre and now aren't going to get half of it back - since you can't get blood out of a stone.

I also agree with Harry Powell to a certain extent - if I was crippled tomorrow I'd be in the sh** with my mortgage company. However, I do take steps to minimise the damage - for example I live in a modest house to keep my mortgage as low as possible when in reality I could probably borrow a lot more. If I was put into hospital tomorrow I'd have to find £150 a month to pay my mortgage, whereas lots of people would have to find £500 a month simply because they chose to live in a better house.

I think having my own business has made me realise that next month I could actually earn £0 if things don't go so well, whereas most people niavely take their job and their circumstances for granted.