Credit Card tragedy

System

A further point, on the new house price etc board there is a thread, and I accept that this is a comment from someone who uses this site, that mentions how the average cost of a house in 1995 was around £62,000.

That would easily be affordable for me and my girlfriend.

What's the average in 2004?

It's something like £150,000.

So, anyone out there. Can you see the problem?

The poster above the two from me can't.

zcaprd7

Actually you could die with £100k worth of credit card debts and they would die with you (as long as you had no will)...


And I think your assets would still get passed on (not 100% on that but I believe its true - credit card debt is unsecured lending after all).

System

That surely can't be true as everyone would go through life just making the minimum monthly payment and the lending companies would make diddlysquat.

It is unsecured lending, but they can still take everything else of value you have (through a court order) in order to get back what you owe. The only thing they can't touch is your house.

I've always worked by the rule that the debt is passed on to your next of kin. It doesn't just disappear.

Robert_Sterling_3

Message deleted as it was going  "off topic"  RS

Sorry Dave that by removing my message the humour of your post below will not be apparent to other readers.

System

That was in the days before stamps had been invented.....

cafenervosa_2

A further point, on the new house price etc board there is a thread, and I accept that this is a comment from someone who uses this site, that mentions how the average cost of a house in 1995 was around £62,000.

That would easily be affordable for me and my girlfriend.

What's the average in 2004?

It's something like £150,000.

So, anyone out there. Can you see the problem?

The poster above the two from me can't.

I am in the same position Dave, I am 27.  I remember when the prices where less than £30k for a 2 bedroom house and I decided to wait because I thought it was a bit much.  Now like you say they have shot up to £150k average and I am still renting.  I never intended to but the housing market has gone stupid as you said.

The thing is though is that wages have not changed a great deal so something don't add up. I've always hated to get into to much debt, maybe the council is a good option even though i've been on the list for 1 year now and still not got got any offers of the flats that i've applied for.

zcaprd7

Tis true Dave!

http://forum.moneysavingexpert.com/cgi-bin/yabb/YaBB.cgi?board=Debt;action=display;num=1096375550


Or worse case scenario declare bankrupcy - but hey after a year you're sorted (no credit for 6 years though) and you've spent up £100k!

Of course, not so good for the general public to know this but...

Tim_L

Debt isn't automatically passed on on death. It is charged to the value of a deceased's estate and must be paid out of assets or proceeds of the sale (for example) of any property. But if the debts exceed the value of the estate then no-one is obliged to take up responsibility.

cafenervosa_2

So how do the CC companies get the money back when the person are not able to pay it or even die ? They can't expect the debt to be passed onto family so in that respect its a huge loss for the company.

Does the credit card companys make enough money from other customers to cover themselves for this sort of thing ?

zcaprd7

They don't, they write it off...and yes they make lots more money.


Its a matter if risk (which is why poor people can't get very good terms, but the credit card companies make more money on the ones who do pay i.e. most of them).

Obviously they assessed this guys risk incorrectly - I have no sympathy for the card companies - they can see how much an applicant is being lent by others when they credit check...