I don't understand the problem. Why should a person not be required to pay back what they borrowed plus interest?
I am not a fan of the new BK laws...on the other hand people need to take responsibility for their actions and their debts. The loop hole that was closed with the new BK law will affect high salary earners and hold them accountable more so than the average earner.
The problem is a ton of borrowers are leveraged to the hilt as it is and as time progresses the interest only or floating rate mortgages of 5-6% is now 8-9+%, the credit card debt of 16% is now 21-22+%. If there are millions of people just making ends meet now, what's going to happen when there salary stays the same (or decreases) but debt obligations increase? Everyone today has been spoiled with cheap money, alot can't remember how tough things were in the early 80's with jobs, interest rates etc let alone the great depression of the dirty 30's. Call me an eternal cynic fine, but all the telltale signs are passing us by. I'm on the same page as SouthAmerica with this. Just a matter of time before the inevitable, tick, tick, tick.
Most families have some credit card debt, but I think most families are two income earners as well. I think they will be able to handle the debt load and manage their payments. The house still provides a very valuable tax deduction, and those that have chosen to take the interest only option have a decent salary history, and probably have a good handle on what the near term looks like for them. I think people are more financially savy than ever before. As for there payments, theoretically, interest rates on debt should come down over time, actually costing consumers less. Time will tell. I do not see a depression coming, but just in case, I do invest in REAL assets.
Savvy? People who pay ~20% on their credit card balances are either desperate, or completely irresponsible, or just plain nuts.
CC companies reserve the right to change rates without any reason. In general they will do it for a missed payment but they can also do it because they happen to view you as a higher credit risk based on your credit report.
November 23, 2011 SouthAmerica: Regarding "THE RETURN OF DEBTORS PRISONS" The Daily Ticker â November 22, 2011 THE RETURN OF DEBTORS PRISONS: Collection Agencies Now Want Deadbeats Arrested http://finance.yahoo.com/blogs/dail...on-agencies-now-want-deadbeats-172417607.html It is completely crazy to even consider the return of debtorâs prison. The United States is already the most repressive country in the world regarding the number of people that are in prison with the rate the highest in the world per 100 000 population. In many states they have followed the âBrain dead strategyâ for over 40 years, and in many states they spend more money with their prison system than in education. Who is going to pay for the construction and the up keep of all these new group of people that they want to lock up in prison? The states are broke and they are looking for ways to get rid of prisoners to reduce their budget regarding the prison system. Besides the financial world in the United States is full of crooks and scam artists and nobody is going to jail. These people must be brain dead to even consider send to jail people who are unemployed and have no money to pay their bills. These guys are crazy even to bring this subject up when thereâs a revolution under way the âOccupy Wall Streetâ and this is a revolution against the money changers. During the French Revolution the money changers had a special place in front of the line to get their turn at the guillotine. And I bet that up to the last minute most of them did not see it coming. Hopefully history will repeat itself. *** About 6 years ago I started this thread by posting the following information: October 18, 2005 SouthAmerica: Regarding the new bankruptcy law that were effective as of October 17, 2005 in the United States. The changes in the bankruptcy law were made to protect the US financial institutions as much as possible from the coming collapse in the price of real estate, stock market decline, and the massive credit card debt default from millions of credit card holders. Millions of Americans will be in trouble financially, and they will not be able to have a fresh start as in the past. The changes in the minimum payment that people have to make every month on their credit cards - which will become effective as of January 2006 - also will compound the financial problems to most Americans. Never mind that they are being squeezed by the high cost of gasoline and will have a shock when they receive their heating bills for the coming winter. On top of that the monthly mortgage payment of many people will increase because of the increase in interest rates. It will not be a pretty sight for most Americans what is in store for them in the near future related to price increases and declining value for their properties and stock holdings. Other sectors of the population will receive drastic cuts on their health benefits, and on their pensions. And they will have to spend more of their resources related to health care. Americans will be hit from every side with higher costs, and declining wages and benefits. ********* The Decaying of America http://www.elitetrader.com/vb/showt...216290&highlight=US+prison+system#post1216290 September 29, 2006 â¦Just to give an example of the economic power of state spending â a few years ago when I did research on the subject I found out that the State of New Jersey prison system budget to run that system for a period of one year it was larger than the combined budgets of all prison systems in Brazil for the entire country; including federal, state and local prisons and jails. ***** June 18, 2007 SouthAmerica: The story reported by The Associated Press is a little incomplete. The Brazilian legal system is based on âRoman Lawâ and the âNapoleonic Codeâ systems. The article said: âThere are 172,000 prisoners awaiting trial in Brazil alone, its government said.â What the article it has not mentioned is that the current total prison population in Brazil is estimated to be 260,000 prisoners. In 2007, the total population in Brazil it is estimated to be 190 million people including an estimated 260,000 people in prison. In 2007, the total population in the United States it is estimated to be 301 million people including an estimated 2,200,000 people in prison. The United States population is 57 percent larger than the Brazilian population. But the United States prison population is 850 percent larger than the Brazilian prison population. In Brazil they donât have a âStatue of Liberty.â In Brazil they have âLiberty.â ********** The economic impact of the current Exodus from the United States http://www.elitetrader.com/vb/showt...870890&highlight=US+prison+system#post1870890 April 5, 2008 Prison population: In 2007, the total population in Brazil was estimated to be 200 million people including an estimated 260,000 people in prison. In 2008, the total population in the United States it is estimated to be 303 million people including an estimated 2,200,000 people in prison. And there are also on top of that over 5 million American on probation. The United States population is 51 percent larger than the Brazilian population. But the United States prison population is 850 percent larger than the Brazilian prison population. Putting poor people in prison is one of the few ways Americans know how to create new jobs today inside the US economy. ********** Lou Dobbs on "Population Explosion" in the United States http://www.elitetrader.com/vb/showt...037975&highlight=US+prison+system#post2037975 August 22, 2008 SouthAmerica: Most people have an idealized concept regarding population growth based on religious beliefs and a on a self-serving economic theory that expect these future generations to supply the tax revenue to support the old generations and their retirements. Keep in mind these 2 figures as you read this information: 1) First the current population of the United States is 305 million people and you can check the figure grow at the following website: http://www.census.gov/main/www/popclock.html 2) Today the United States prison system is incarcerating over 2.3 million people at an astronomic cost for the entire system. The prison population in the United States went from about 200 thousand people in 1970 to about 2.3 million people in 2008. Most Americans are not capable to connect the dots and figure out that there is a direct relation to population growth in the country and the population being incarcerated on its prison system. And Americans are so stupid that they are outsourcing millions of jobs to other countries and creating an even bigger problem to its own society. Americans also canât figure out that millions and millions of people would never be a rocket scientist or a brain surgeon and that they need all these manufacturing jobs that they have been exporting to other countries to keep its own population employed. Americans have a very short-term mindset and they canât see much further into the future than the next day or the next year â and they canât connect the dot to even be able to save their own lives. ***** On my second book published in December 1998, I had an entire chapter about the prison system in the United States. And here I am quoting from information on that book: Period 1930 - 1970 The United States population grew from 123 million people in 1930 to 203 million people in 1970. During this 40-year period the U.S. had a 65.0 % population growth. The Federal and State Prison population in the United States grew from 129,453 prisoners in 1930 to 196,429 prisoners in 1970. During this 40-year period the prison population had a 51.0 % inmate population growth. (These figures do not include the people on county, municipal and local jails, but even if we did include them on our calculations, the totals would have changed at around the 50.0 % level). Period 1970 - 1997 The United States population grew from 203 million people in 1970 to 269 million people in 1997. During this 27-year period the U.S. had a 33.0 % population growth. The Federal and State Prison population in the United States grew from 196,429 prisoners in 1970 to 1,218,256 prisoners under Federal and State jurisdiction by June 30, 1997. During this 27-year period the Federal and State prison population had a 520.0 % inmate population growth (These figures do not include the people on county, municipal and local jails, if they were included the growth rate still would have been over the 500.0 % level using the equivalent base 27 years early.) The near future estimated figures. The United States population is estimated to grow from 269 million people at the end of 1997 to an estimated 299 million people in 2010. This represents an estimated population increase of 11.0 % in the next 13-year period. The total number of people incarcerated in the U.S. prison and jail system which is estimated to be 1,800,000 people as of the end of 1997. Depending on how the United States gets its legal system to be even tougher, and criminalize itself to death, making any minor problem a reason to send people to jail or to prison, and keep them inside for longer periods of time (a trend which is already in an advanced stage in the U.S.) then we can make two estimates for the future. .