Debt interest may be waived for persistent debtors who cannot pay.

lazer-zxr

StopIt wrote: »

I suggest you talk to a debt charity and try your line of reasoning. You'd get that reality isn't as idealistic as you want it to be and the debtors that they deal with generally require help and sympathy, not contempt.


You sorted your debts, that's great. I personally am debt free and intend to stay that way. I will not judge others however and tell them that their circumstances can be fixed by just "bucking up" along with glib comments that cast aspersions on their lives.


As for insurance? Sure, I use insurance products as needed but they don't cover everything. For those in precarious financial positions that wont help much, along with the fact that as the PPI scandal has shown, these products seem to be more there to pad financial institutions profits than provide protection to their clients.

Thanks for the input, but I think it's unfair to infer I promote contempt. I genuinely try to be part of this forum and help fellow DFW, and I do have sympathy for those in debt (got the T shirt). I just don't like the 'get out clause' approach.

StopIt

lazer-zxr wrote: »

Thanks for the input, but I think it's unfair to infer I promote contempt. I genuinely try to be part of this forum and help fellow DFW, and I do have sympathy for those in debt (got the T shirt). I just don't like the 'get out clause' approach.

You said

People not paying back what they have borrowed, and the interest they agreed to pay make me so angry.

That's pretty much condemning people you don't know, whose circumstances you don't know because of your own circumstances. That's pretty much the definition of contempt to me.


How often have we seen people literally tear themselves apart because of debt. People have killed themselves because of debt. It's money for crying out loud it shouldn't be that important. What is never helpful is people who can be extremely vulnerable coming here, reading comments like yours and not seeking help because they think that because they can't pay their debts, that people like you will be "so angry" at them.


Do not judge lest you be judged.

January2015

lazer-zxr wrote: »

Thanks for the input, but I think it's unfair to infer I promote contempt. I genuinely try to be part of this forum and help fellow DFW, and I do have sympathy for those in debt (got the T shirt). I just don't like the 'get out clause' approach.

I look at the proposals in a different light - not a get out clause, but a support mechanism for customers and a long term gain for creditors.

As I said in my earlier post, the proposals do not state (that I can see anyway) that interest would be waived indefinitely.

Importantly, for me anyway, the credit card companies would be forced to take some responsibility. In our case they were constantly increasing our limits even though we only ever paid the minimum payments and we were clearly spending again each time they increased the limit. These proposals would make them review the accounts and step in to support customers to repay. I know, I should never have got to the state we did - but we are where we are and had this proposal been in place we would probably never have got to over a £100k in unsecured debt.

As I also said earlier, by implementing this process creditors will gain overall in that they will be repaid in full (ok, less some interest). At the moment, such accounts are defaulting and being sold on for pence in the pound.

lazer-zxr

StopIt wrote: »

You said
That's pretty much condemning people you don't know, whose circumstances you don't know because of your own circumstances. That's pretty much the definition of contempt to me.


How often have we seen people literally tear themselves apart because of debt. People have killed themselves because of debt. It's money for crying out loud it shouldn't be that important. What is never helpful is people who can be extremely vulnerable coming here, reading comments like yours and not seeking help because they think that because they can't pay their debts, that people like you will be "so angry" at them.


Do not judge lest you be judged.

Look, maybe I've spoken out of turn here. Angry has the been the wrong choice of words, I don't actually feel anger, I just don't like the idea of people not paying what they owe. I have been on the other end of being owed money, and not received it, and it just feels wrong.

We all have a vested interest in these financial institutions, because like it or not, they probably make up some element of our pension portfolios.

Let's agree to disagree on the "get out clause", and hope non of us ever have to use it.

Bumblebear

enthusiasticsaver wrote: »

Budgeting and money management should also be taught in schools as I have noticed parents in financial difficulties usually lack the skills to teach their children how to cope with personal finance once they are adults. We taught our daughters but not everyone is in a position to do that.

I absolutely agree with this to help curb this as a long term issue. It wouldn't solve every problem, but I think it would make a serious dent.

I also agree with EnthusiasticSaver's point about the levels of minimum repayments. I once had a £3.5k card credit card with Halifax, lord knows what the APR was, but the hook was that it was only £5 minimum repayments for a year!

sourcrates

Bumblebear wrote: »

I also agree with EnthusiasticSaver's point about the levels of minimum repayments. I once had a £3.5k card credit card with Halifax, lord knows what the APR was, but the hook was that it was only £5 minimum repayments for a year!

Exactly, 3% minimum repayment, probably not much different than your DMP payment might be.

Funny that, or could it just be coincidence ?

dumpyboy

lazer-zxr wrote: »

If your lifestyle and debt commitments require a certain level of income, maybe we should educate people of the need for a suitable insurance policy to protect against illness or redundancy. Surely this proactive approach is healthier than a reactive get out clause.

Having such insurances in place certainly gives me a little more confidence considering any upsets that may occur. I'm in debt, but if I become ill, or lose my job, I am insured to make sure my mortgage is paid and my debts are cleared.

Again, maybe I'm being narrow minded because it was my situation, and havnt had the exposure yourselves have had helping others in debt.

Here Is expamble of insurance I had payment protection with Sainsbury and bank of Scotland I was off work for 3 weeks then back for 6 weeks company went bust claimed ,it was refused as they classed me on short term contract worker so policy null and void . One year latter I tried to claim the miss selling of it ,they refused as they said it was rightly sold and fit for what I wanted, waited 18 months for fos to get it back, so check the small print in your insurance policy or you never know you may one day need this
Yourself

Aytoun27

sourcrates wrote: »

I think your misinterpreting the proposed changes here anyway.

All they are asking for is the freezing of interest to be made compulsory for people in financial trouble, ie on a DMP, instead of voluntery as it is now.

You must agree that if Janet can only afford £10 a month to pay her debt, yet the creditor is charging that in interest, Janet will never repay her debt, so continuing to charge her interest is pointless.

I waded through half of the consultation paper this afternoon and it seems to be a bit more complicated than you suggest. Firstly, there's no opt out, no 'I'm not in debt, thank you very much', so anyone who fits the criteria will have to take part in a compulsory process or have their card suspended and a report made to the CRAs. This will even apply to people who could pay more but have chosen not to. And it will also affect anyone snowballing their way out of debt as well as anyone who simply wants to pay off everything the owe, including interest and charges, no matter how long it takes.

I do agree with your Janet example above, the freezing of interest is the good part of these proposals. What I disagree with is it being a compulsory process with no opt out option, even though people making minimum payments haven't broken their credit card agreements.

StopIt

Aytoun27 wrote: »

I waded through half of the consultation paper this afternoon and it seems to be a bit more complicated than you suggest. Firstly, there's no opt out, no 'I'm not in debt, thank you very much', so anyone who fits the criteria will have to take part in a compulsory process or have their card suspended and a report made to the CRAs. This will even apply to people who could pay more but have chosen not to. And it will also affect anyone snowballing their way out of debt as well as anyone who simply wants to pay off everything the owe, including interest and charges, no matter how long it takes.

I do agree with your Janet example above, the freezing of interest is the good part of these proposals. What I disagree with is it being a compulsory process with no opt out option, even though people making minimum payments haven't broken their credit card agreements.

If you're making minimum payments on an interest bearing credit card, a reply of 'I'm not in debt, thank you very much' would be a lie. In fact, this may be a wake up call to those who think that credit card debt somehow doesn't count as "real" debt.


Making minimum payments/stoozing on a 0% CC would not be affected by these measures.


These proposals give plenty of time for a customer to resolve this themselves, including balance transfers to a new account if they so wish to avoid these measures. The uncomfortable reality check it gives though is welcome in my eyes.

iolanthe07

When I got my first credit card in 1975 (Access) the minimum monthly payment was £5 or 15%, whichever was greater. A return to rules like that would prevent a lot of people falling into serious credit card arrears.