Debate House Prices
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unsecured debts

lemonjelly
Posts: 8,014 Forumite


I still feel the personal debt burden hasn't played out yet.
On that note, I found this story interesting:
http://www.bbc.co.uk/news/business-11865590
Banks are significantly reducing their writing off of debts.
They must obviously feel they are more likely to get something back in two thirds of cases. Either that, or they are simply reluctant to be writing off the amounts they have been. Perhaps they are unwilling to add the negatives to their balance sheets?
Thing I am thinking about, is that this will impact on people a lot. Where some of these debts would have been written off a year ago, now they will be chasing for repayments.
Could get interesting. Could get quite confrontational.
On that note, I found this story interesting:
http://www.bbc.co.uk/news/business-11865590
Banks are significantly reducing their writing off of debts.
They must obviously feel they are more likely to get something back in two thirds of cases. Either that, or they are simply reluctant to be writing off the amounts they have been. Perhaps they are unwilling to add the negatives to their balance sheets?
Thing I am thinking about, is that this will impact on people a lot. Where some of these debts would have been written off a year ago, now they will be chasing for repayments.
Could get interesting. Could get quite confrontational.
It's getting harder & harder to keep the government in the manner to which they have become accustomed.
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Comments
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Not really as bank doen't tell customers they have written off debts in many cases. It is just a paper provisionning exercise.0
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Banks chasing more people for payment, this could become ugly.
Q) When is unsecured debt not unsecured debt?
A) When a judge grants a charging order.0 -
Banks chasing more people for payment, this could become ugly.
Q) When is unsecured debt not unsecured debt?
A) When a judge grants a charging order.
Which are also on the increase, & was recently reported, including on this website very recently...It's getting harder & harder to keep the government in the manner to which they have become accustomed.0 -
lemonjelly wrote: ». Either that, or they are simply reluctant to be writing off the amounts they have been. Perhaps they are unwilling to add the negatives to their balance sheets?
.
When a bank writes off a debt in the UK, this doesn't mean they stop chasing. It generally means they sell the debt to a debt collection agency who then hounds the debtor.
As a speculation, due to general changes in consumer credit law (the consumer credit act 2006), the DCA have come under the same regulatory regime as banks. Ever since that happened, a number of the benefits of writing off debt have reduced, since the regulatory arbitrage and legal liability issues have made it less profitable to write off debt.
As a consequence of that, a number of banks were certainly considering bringing debt collection back inside the bank, which would mean write offs would become less frequent.
Maybe this is one of the predicted impacts of the law change finally coming home to roost?lemonjelly wrote: »Which are also on the increase, & was recently reported, including on this website very recently...
the increase in charging orders is a consequence of the CCA 2006, since it became almost inevitable that a charging order would be granted even if an installment order was granted on a CCJ. This is, in my opinion, one of the worst policies of the labour government.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
Write-offs are one thing. Debt collection is another.
Write-offs are an accounting technique which will generally be over-stated in a time like this. A. it reduces tax. B. When the share price is already 'emotionally' down you might as well lay it on thick, take the pain, so that you can only produce 'good news' in the future.
As a separate matter, I expect banks to persue debts vigorously. Why shouldn't they? And anything they recover over and above their pessimistic 'provisions' is a bonus!
Literally!
Gin & Tonics all round.....0 -
What's the problem?
- Bank writes off debt
- Writen off debt reduces the reserves by about 80p for every £1 written off (depending on the type of debt)
- Taxpayer tops up the banks' reserves.
I was under the impression from all the newspapers and websites that I read that bank bailouts are a good thing. Well here's a chance for the British Government to do even more good. Who needs nurses when you've got bank shareholders that haven't lost all their investment?
PS I hope you guys are putting your pennies aside to bail out Portugal. In Portugal you can retire aged 55 (link).0 -
Banks writing off lower amount of unpaid debts, due to there being a lower amount of unpaid debt.
I guess it can't be as simple as that :eek:'In nature, there are neither rewards nor punishments - there are Consequences.'0
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