Anyone ever had a succesful Final Offer letter?

Turning_into_scrooge

ceegee wrote:

I have to say that I agree with peterbaker and westernpromise. I know that some people get into financial trouble for reasons beyond their control, but there are others who see FandF settlements or bankruptcy, even, as some sort of lifestyle choice. I have posted vehemently about this elsewhere and shall probably continue to do so.

Posted by another "mug". :mad:

I must admit i unfortunately know someone who has gone bankrupt 3 times now just to save himself money. How he does it i have no idea but i do know he is rolling in cash. He disgusts me as he IMO is not really a worthy contender. He has nevre been on bennefits or on the bread line but seems to make an occupation out of doing it :mad:

westernpromise

ag359 wrote:

Banks make HUGE profits, which considering they don't actually contribute anything tangible to society they probably shouldn't complain about.

If banks contributed nothing to society, they would not exist. In fact, what we term society would not be possible without banks. The invention of credit was a huge step forward and was one of the main reasons European economies outperformed otherwise more technically advanced countries like China from about the 13th century. Britain's access to a far more advanced financial system than that of France or Germany kept us afloat during the Napoleonic and two world wars, for instance.

In fact the people that really lose banks money are the people who take interest free overdrafts, 0% Balance transfers, and people that pay off their credit cards on time every month - should these people have their pensions cut too??

Tripe, I'm afraid. Banks expect to incur a certain amount of cost in acquiring a customer. Whether that's through offering a 0% deal, or via advertising, scarcely matters. They assume that on average they will make money out of the customers drawn in by these means. They also make money from people who pay off their balance every month; the retailer is charged a processing fee.

There is no comparison between people who acquire and use bank products responsibly and to terms, and those who run up huge debts and then skip out on them because they just don't feel like paying up, even though they perfectly well could. The impact of such loss is felt on the bank's bottom line, in the form of bad debt writeoffs.

Since all retail banks are publicly quoted, in the UK at least, bad debt reduces the value of the company. A bank worth £10 that has to write off bad debt of £1 is a bank that is worth £9, and the shares fall by 10% too as soon as such a writedown is made.

The majority of shares in publicly quoted companies are actually owned by pension and investment funds. Ergo, people who default on their debts out of convenience and fecklessness, rather than genuine financial misfortune, are reducing the value of savers' shareholdings, which means that current and future pensioners are paying for the bad debt. It really is as straightforward as that, I fear.

In fact, the level of bad debts affects how many people the bank can afford to employ if its operation is to make money. If it cannot make enough money relative to the risk it is taking, then it may simply close down the offending division and withdraw from that part of the market. In that case, the bad debt is paid off by the withdrawal of salary from the individuals who get sacked in the closure. At best, it will hold headcount down to limit costs. So other people have their salaries taken away, or don't get hired in the first place, because of bad debtors.

Of course this is just the kind of fecklessness that the government is trying to encourage. The supposed economic boom we have been experiencing has been fuelled entirely by the annihilation of the saving habit, the looting of pension funds, and the rocketing of personal debt. If we weren't spending it all like water now, we'd be in recession.

Rather than encouraging all this, there is IMHO a lot to be said for abolishing any time limitation on debt, so that the creditor can go back later and reclaim the debt from the undeserving. Someone who has suffered genuine financial hardship - loss of income, for instance - would not be affected. But someone who makes £50k a year and wants to keep it all, rather than pay what he owes, should I think remain liable for the rest of his life, or for 50 years at any rate, and perhaps sample in his own retirement what he is dishing out to others in theirs -- regardless of whatever temporary arrangement the bank may accept.

westernpromise

MoneyBags wrote:

he he he this is funny.

As the big four made £27.9bn profits last year, I don't think FandFs will dent the margins much.

Those are their global profits. Is 27.9 enough, by the way? What was the risk-adjusted return on capital employed? Maybe it should have been 35 or 50?

westernpromise

Turning_into_scrooge wrote:

I must admit i unfortunately know someone who has gone bankrupt 3 times now just to save himself money. How he does it i have no idea but i do know he is rolling in cash.

How does he do it? Simple - we all pay for him. Our borrowing rates are higher, our deposit rates are lower, and our share portfolios are worth less because of people like him.

To go bankrupt serially is little different from fraud, really.

downandout!

Valid points westernpromise if aimed at the right people.

Do you really think the people using this site intentionally accrued huge debts which they never had the intention of paying back? Naive, very unlucky, or downright stupid in some cases maybe, but cheats I like to think not.

I like to think those using this site genuinely wish to change their ways and no longer be a burden to society but do you really endorse making them pay for the rest of their lives?

"In fact, the level of bad debts affects how many people the bank can afford to employ if its operation is to make money"
Bad debts also create jobs for the debt recovery agencies so it is not all 1 way.

westernpromise

downandout! wrote:

I like to think those using this site genuinely wish to change their ways and no longer be a burden to society but do you really endorse making them pay for the rest of their lives?

Sure, why not? I can see how the typical bankrupt of 20 years ago deserves a break. Historically, bankrupts were mostly people who'd lost their income. Fair dos, you can't pursue people like that. Misfortune and adversity happen.

But today, the typical bankrupt isn't like that. He or she has a job and a steady income. They are nowadays likely to be people who have simply spent their way to their credit limit and only call a halt when they can't service the minimum payments. At that point, they give their debt to the rest of us and in some cases go off and do it again.

I'd allow creditors discretion for 50 years or so to recover that debt. After all, the OP here is moaning about how he'll spend 8 years paying off what he admits he's spent. So he gets let off, can afford to buy a house as a result, and in 20 years he has a few hundred thousand in equity.

At that point the creditors should be able to take an interest in him and recover the bad debt he can easily afford to repay (and in fact always could afford to repay, even today - he just doesn't want to).

It's fairer to everybody. He can easily afford it, fecklessness is not rewarded, and pensioners and savers aren't punished.

downandout!

So your solution is to postpone the debt until they can afford it?

Malestrom

This is an interesting discussion with many valid points from both 'sides'. However, neither this thread nor this forum is the place to have such a discussion so I would suggest that this is taken elsewhere.

Paul_Varjak

Malestrom wrote:

This is an interesting discussion with many valid points from both 'sides'. However, neither this thread nor this forum is the place to have such a discussion so I would suggest that this is taken elsewhere.

I agree - perhaps this would be a more appropriate forum:

Discussion Time,

ag359

westernpromise wrote:

Sure, why not? I can see how the typical bankrupt of 20 years ago deserves a break. Historically, bankrupts were mostly people who'd lost their income. Fair dos, you can't pursue people like that. Misfortune and adversity happen.

But today, the typical bankrupt isn't like that. He or she has a job and a steady income. They are nowadays likely to be people who have simply spent their way to their credit limit and only call a halt when they can't service the minimum payments. At that point, they give their debt to the rest of us and in some cases go off and do it again.

I'd allow creditors discretion for 50 years or so to recover that debt. After all, the OP here is moaning about how he'll spend 8 years paying off what he admits he's spent. So he gets let off, can afford to buy a house as a result, and in 20 years he has a few hundred thousand in equity.

At that point the creditors should be able to take an interest in him and recover the bad debt he can easily afford to repay (and in fact always could afford to repay, even today - he just doesn't want to).

It's fairer to everybody. He can easily afford it, fecklessness is not rewarded, and pensioners and savers aren't punished.

What a load of rubbish - unfortunately you have to have a bit of certainty in the world, and you can't suspend creditors' interests indefinitely until they have some opportunity to start pursuing the debtor again. You'd have a ridiculous situation on your hands, and it would just mean that bankrupts wouldn't bother working or trying to save/buy a house, because as soon as they did, under your regime, they'd have it taken off them. You have to draw a line at some point and just let it go.

I don't know if it was you, westernpromise, that replied to my point about banks not really contributing to society, but what i said was that they didn't contribute anything TANGIBLE to society - there's a difference. What a meant is that most of what they do is essentially shifting money around from one person to another, rather than creating or producing anything new. That's not the same as not contributing anything at all to society, which was not what i said.

Moreover, the typical bankrupt is not someone doing it just to get out of paying debts - its just that you only hear about the ones that are. Most people seeking bankruptcy and FFSs are in genuinely need, and its naive to suppose otherwise, just based on a bit of hearsay. Do you read the Daily Mail by any chance?