When Debtors Decide to Default

Discussion in 'Wall St. News' started by ipatent, Jul 26, 2009.

  1. ipatent


    <p>Melissa Birks is being stalked. Her cellphone keeps ringing, always from a caller marked &ldquo;unknown.&rdquo; She says she knows it is her <a title="More articles about credit cards." href="http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_and_money_cards/index.html?inline=nyt-classifier">credit card</a> company wondering why she stopped making payments. Ms. Birks, who owes $28,830, has nothing to say.</p>
    <p>Those on the front lines of the debt industry say there is a small but increasingly noticeable group of strapped consumers who, like Ms. Birks, are deciding they will simply stop paying. After loading up on debt eagerly provided by the card companies during the boom times, these people now find themselves trapped in an endless cycle where they are charged interest on interest and fees upon fees while the lenders get government bailouts.</p>
    <p>As if people like this are going to be paying for the bailouts anyway.</p>
    <p>They are upset &mdash; at the unyielding banks and often at their free-spending selves &mdash; and are pre-emptively defaulting. They could continue to pay for a while longer but instead are walking away. &ldquo;You reach a point where you embrace the darkness of default,&rdquo; said Adam Levin, chairman of the financial products Web site <a target="_" href="http://credit.com/">Credit.com</a>.</p>
    <p>The lending industry term for these people is &ldquo;ruthless defaulters.&rdquo; In a miserable economy where paychecks, savings and expectations are all diminished, their numbers will surely grow.</p>
    <p>I'm sure they will grow, after the NYT spreads the word that is is socially acceptable behavior.&nbsp; It has previously run articles that were in effect instruction manuals for getting the CC companies to write down debt.&nbsp; Most customers would have no clue about this if the NYT wasn't telling them.&nbsp; If just makes the banking crisis worse.&nbsp; Then consider it was the NYT in the first place pushing for legislation forcing banks to loan to bad credits risks years ago during the boom times.</p>
  2. Uncollateralized debt is a ticking time-bomb and these companies know it.
  3. Credit card companies are hilarious. Instead of offering credit in which they tend to uphold their end of the arrangement, they offer fantasy land credit. Low interest, high credit limits, and great introductory perks.

    THe day you actually need your balance to help float a really shit month, the ccc will slash your credit "limit" and increase your interest rate. I find it hysterical.

    Happened to me, I put 3,100 on my 4k credit card and paid it off in full within that same billing cycle. Credit card company cut my credit limit...
  4. We need to bring back debtors' prison... :D
  5. Debters prison will cost more tax money. If banks don't stopped the steep increase in interest rates and hefty fees, more will default.

    The lady you mentoned can change the cell number and let friends and family know the new number. Getting get of these "anon" calling for good.
  6. Here's another way to look at this:

    The Bankruptcy reform act of 2005 was notoriously pro lender. It made filing for Chpt 7 (clean sweep) that much more difficult for the avergae American. Chpt 7 for business, to my knowledge, has not been impacted.

    So... the CC companies figure, hey, we can now lend to EVERYONE because they can't get away fom it, and we can also charge ridiculous late fees with this legislation... So what did the CC companies do? They relaxed their standards thinking CC reform will cover them. They lent like crazy and focused on the weakest debtors because that's where they make most of their money.

    Then the tsunami hit. You can shear the sheep, but you can't skin them alive... Defaults skyrocketed... much more carnage to come... And what happened? The banks got bailed out. And the average American? Job outsourced, higher inflation on commodities (gas, food) due to bailouts... etc.

    So, the banks got bailed out after trying to rig the game in their favor - it backfires on them, but no worries. The Treasury and the Fed have their back.

    Am I angry at people with 6 flat screen TVs and high credit card debt? Yes. Am I angry at people that got swamped with medical bills or were unemployed and lived off credit cards? Not really.

    Am I angry at the Banks and Congress? Big time
  7. She can change her number, but can't the CC sue her and put a lien against any real estate she owes as well as garnish her wages?
  8. Depends on the state.

  9. Wrong. Let the banks burn. Greedy bastards with tricky contracts. Idiots will get what they got coming.
  10. I use no credit card unless I get rewards, and I've never paid a penny of interest in my life.

    If everyone did this the CC companies would still be profitable, as they charge a 2% to 3% transaction fee to the merchant, and the banks get a bribe...err, I mean piece of that, too, so that they can lobby with the CC companies against greater regulation.

    Credit cards are a real problem in the U.S. They are lifelong addictions for most people, and once someone falls behind by a certain % of their income, they'll never be able to pay off the debt.
    #10     Jul 26, 2009