Debt collector is chasing me...

[Tyler Durden]

I'm pretty sure the general consensus here would be that he should pay his debts and that he should pay them in full.

The thing is that the debt has been written off by the bank so he could probably get away with paying only a fraction of what he owes or nothing at all if he was quite aggresive about handling the debt. Whether this is a good or a bad thing is up to your own judgement.

For me the former course of action is a practical solution and given the original owner of the debt will not benefit if he pays extra. Trying to escape from the debt scot free to me is morally abhorrent.

Giving a 16k credit card limit to a kid in his first job unless they are earning >100k seems absurd. Sounds like one of those pre-approved credit card deals and is equally irresponsisble.

I'm not knocking all the financial institutions I don'teven have a problem with the even higher interest rates that CCV charges for smaller loans because the people that they provide credit for aren't serviced by the major financial service companies and the cost of providing these loans are much higher. They also don't provide endless rollovers so that a smaller debt like the OP become something absurd.

Interesting read though and I'm sure everyone would like to know the outcome.

Very succint response.

I don't think morals have a part to play in this situation, for a couple of reasons:

1. The bank knew the risk and they took it. It's like if someone asked me for a $1,000 loan and I knew there was a good probability they could not/would not pay me back, I can't lend it to them and then complain about not being repaid. If I lend that money, then I've accepted that level of risk.

2. People without morals when it comes to money will almost always be financially better off than those with morals. I used to have a high level of morals - I would complete my tax return with 100% honesty, even if people told me to do x so I could pay less tax, I wouldn't do it. I was of the view that police and hospitals need our funding.

Then I hear about politicians using our tax dollars for overseas trips, prostitutes, surfing the net for kiddy pr0n, giving themselves 30% raises etc and I realised that you can't care for a system that doesn't care about you. How many of us with morals here have paid more tax than Kerry Packer? I'm sure he slept a lot better than all of us. Money is money - it's every man for themselves.

 

[Smurf1976]

Banks credit matrices make no sense. The were willing to offer her approx. 35% of her salary, yet only less than 5% of mine

I ended up with a card with a 4K limit drawn on a (now ex) partner's account. She knew nothing about it and, even more interesting, we never had any joint accounts of any type with that bank.

That one really amazed me and to some extent still does.

 

[Smurf1976]

People without morals when it comes to money will almost always be financially better off than those with morals. I used to have a high level of morals - I would complete my tax return with 100% honesty, even if people told me to do x so I could pay less tax, I wouldn't do it. I was of the view that police and hospitals need our funding.

Then I hear about politicians using our tax dollars for overseas trips, prostitutes, surfing the net for kiddy pr0n, giving themselves 30% raises etc and I realised that you can't care for a system that doesn't care about you.

I've reached the same conclusion. I won't do anything illegal, but I'm not about to pay a cent more than I have to and the reason is simply that I'm fed up with seeing my money wasted.

Instead I choose to donate directly to worthwhile charities who I feel will do some more good with the money. I am also considering seeing if they need any volunteer collectors to help raise funds as I feel that would also be a useful way of contributing via my time.

I would be quite happy to pay more tax to fund the hospitals, maintain infrastructure and so on. A hike in GST or income tax is an idea that I'm more than happy with but ONLY if the money is used sensibly and not wasted. Until such time, I'll be paying as little as I legally can.

 

[Julia]

Yes. Just like I toned down my posts on debt defaulters. I guess the pro debt defaulters have won the day. As a matter of interest what is your opinion on renters who refuse to pay rent and trash the house? You needn't answer. I guess I am just one of Knobby's "diehards" with an antiquated sense of right and wrong.

+1. So, Knobby, you don't see any need for honouring debts or fulfilling one's obligations? I'd clearly formed the wrong impression of you.

One of your best quotes yet gg, a $1000 a month sounds reasonable to me,for petty theft.
Also Junior and Disarray I bet if he owed you $6k you would be choppin at the bit to get your money back and the first ones to whine and moan if he dudded you like you suggest he duds others.

Exactly my thoughts. I'm pretty sure both the above would scream loudly if someone did the dirty on them.

I'm pretty sure the general consensus here would be that he should pay his debts and that he should pay them in full.

The thing is that the debt has been written off by the bank so he could probably get away with paying only a fraction of what he owes or nothing at all if he was quite aggresive about handling the debt. Whether this is a good or a bad thing is up to your own judgement.

For me the former course of action is a practical solution and given the original owner of the debt will not benefit if he pays extra. Trying to escape from the debt scot free to me is morally abhorrent.

Giving a 16k credit card limit to a kid in his first job unless they are earning >100k seems absurd. Sounds like one of those pre-approved credit card deals and is equally irresponsisble.

I'm not knocking all the financial institutions I don'teven have a problem with the even higher interest rates that CCV charges for smaller loans because the people that they provide credit for aren't serviced by the major financial service companies and the cost of providing these loans are much higher. They also don't provide endless rollovers so that a smaller debt like the OP become something absurd.

Interesting read though and I'm sure everyone would like to know the outcome.

Great post, Suhm.
It's amazing how we can rationalise our dishonesty via the assurance that it's all the bank's problem if they make a loan to someone who is a poor risk. Their high interest rate apparently absolves us of any moral obligation.
Whacko, what a great society.

Smurf, agree entirely with your disgust about how our taxes are being used. I think your determination to pay the minimum legal amount of tax is echoed by most Australians.
But I don't think that sentiment has anything to do with honouring a debt in which we have knowingly engaged.

 

[Knobby22]

+1. So, Knobby, you don't see any need for honouring debts or fulfilling one's obligations? I'd clearly formed the wrong impression of you.

Honesty is the number one thing a person needs in life. I always pay my debts, but the law works in certain ways.

I see nothing wrong with him coming to an arrangement with the Credit company to pay part of the money back on good terms by either borrowing some money from his parents and paying them back or miniscule payments over many years at a low or minimal interest rate.

The loan company bought the loan at a percentage of its worth from the bank. If they can cut a deal its a win /win. I don't see why he should suffer for years when there is a better way. If he went bankrupt no one will get anything. The banks knew what they were getting into when they gave him the credit card though he didn't have a job. They do it for profit and it mucks up many young people's lives.

In the end he still loses; as his credit record is in tatters which will effect his life for many years.

It hardly compares to renting a house and not paying.
Or avoiding all obligation like those barristers (so called upholders of the law) I mentioned. Disaray, Tech/a and others gave him good advice that he should heed.

 

[Tyler Durden]

Let's keep in mind that this guy is struggling financially. There are actually people out there who are more than capable of paying their debts, yet still seek to pay less than what they initially agreed to.

I've reached the same conclusion. I won't do anything illegal, but I'm not about to pay a cent more than I have to and the reason is simply that I'm fed up with seeing my money wasted.

Instead I choose to donate directly to worthwhile charities who I feel will do some more good with the money. I am also considering seeing if they need any volunteer collectors to help raise funds as I feel that would also be a useful way of contributing via my time.

I would be quite happy to pay more tax to fund the hospitals, maintain infrastructure and so on. A hike in GST or income tax is an idea that I'm more than happy with but ONLY if the money is used sensibly and not wasted. Until such time, I'll be paying as little as I legally can.

Yes, I actually do a little charity work myself. I like to donate my old clothes to Vinnie's, and last year I was a volunteer for a children's event. With these methods, at least my contribution is direct and cannot be mis-directed.

 

[Julia]

Don't be a loser and pay it all off just to please some diehards here.

Honesty is the number one thing a person needs in life

Well, now, you seem to be of two minds about honesty and obligation.

The loan company bought the loan at a percentage of its worth from the bank.

I couldn't care less about the fortunes of some debt collectors.
He borrowed X amount from the bank and apparently decided he had no obligation to pay that back, swanning off overseas and seemingly hoping it would just go away. That's the point I and others are making.

If he went bankrupt no one will get anything.

Agree.

T They do it for profit and it mucks up many young people's lives.

Well, those young people need to learn not to take on a debt they cannot handle.
I know bank bashing is a national sport, and I agree that banks have a duty of care - to their shareholders if no one else - to lend responsibly, but for heaven's sake, let's not confer on young people the notion that nothing is their fault. The nanny state is already well on the way to doing this, so let's, please, be encouraging people to take responsibility for their own decisions in every field.

It hardly compares to renting a house and not paying.

I disagree. In both cases, an agreement has been entered into and should be honoured, barring catastrophic illness or the like.

 

[bellenuit]

Apart from the dishonesty aspect, isn't the attitude that it won't hurt the financial institutions overlooking the fact that those institutions will not really suffer as they will pass such losses on to the battlers, whether by higher interest rates (to allow for defaults), higher premiums (to allow for fraudulent claims) or higher taxes to make up for those who don't pay their proper share.

 

[Knobby22]

Well, those young people need to learn not to take on a debt they cannot handle.
The nanny state is already well on the way to doing this, so let's, please, be encouraging people to take responsibility for their own decisions in every field.

.

That is the salient pont, he will suffer! his credit record is shot. He is not getting away with it. All I am saying is that he should be smart and come to an arrangement with the people who bought the loan off the bank.

I know bank bashing is a national sport, and I agree that banks have a duty of care - to their shareholders if no one else - to lend responsibly

The banks (especially GE) deliberately prey on the foolhardy and expect to get some failures. To not do it would be bad for the shareholders!

 

[Julia]

Knobby, we will obviously have to accept disagreement on the topic.

Bellenuit, good point. Of course it's not "the banks" who wear the damage, but the customers to whom they pass on the costs.

 

[Smurf1976]

In principle I totally agree with those saying the debt should be repaid. Morally, that is the correct thing to do.

But likewise, the banks need to make a lot of changes from a moral perspective too and failure to do so will inevitably encourage a "me too" way of thinking.

I think that a lot of the problems really come down to banks and their ability to "outsource" the debts of customers. The so-called packaging of loans and selling the debt etc. Outlaw this practice, such that if a debt goes bad then the bank really does lose its own money, and we'll see a proper assessment procedure for loan applicants re-introduced real quick.

I think that both parties are somewhat to blame here. It's wrong to enter into a debt with no intention of repayment. It is equally immoral to market credit, especially those "pre-approved" cards, to those unable to afford it and then expect them to make huge repayments. Both sides are partly to blame here.

Edit: I just logged into online banking to check one of my accounts. There are no less than THREE separate references on the main page offering me a credit limit increase. THREE. And this isn't even a credit card account but is actually a savings account. Banks push lending, I think that is pretty clear.

 

[Calliope]

Banks push lending, I think that is pretty clear.

Of course. That is what banks do.

 

[Junior]

Morally, I entirely agree, that if you take a loan it should be repaid in full.

BUT it is not always that simple. Circumstances change and debts cannot always be repaid. That is why our financial system allows for negotiations, Part X agreements, bankruptcies etc. People lose their jobs, businesses fail, mental health problems, death in the family etc etc. These things can lead to loan defaults and unpaid debts.

Although Ausnick's situation is one of his own making (AND to an extent the bank's making IMO), the fact is that he is part of this system, and in my opinion should assess all of the options available to him - within the law.

At the end of the day I don't think he'll feel any better, or improve anyone's life by repaying the entire debt just out of some strong sense of morals. All it will do is add to Baycorp's bottom line.

 

[prawn_86]

At the end of the day I don't think he'll feel any better, or improve anyone's life by repaying the entire debt just out of some strong sense of morals. All it will do is add to Baycorp's bottom line.

Exactly. The same as one tries to minimise ones tax, why shouldn't one try and minimise ones bills?

 

[Calliope]

The banks (especially GE) deliberately prey on the foolhardy and expect to get some failures. To not do it would be bad for the shareholders!

Fools will always be preyed on. It's a competitive world out there. If the Nanny State could make it illegal to prey on fools I am sure they would do so. But I am sure that even the fools would object to having to wear a sign round their necks saying "I am a fool - be gentle with me."

The biggest worry in ausnick's case (he admits he is a fool) is that one day he will be counselling others.

 

[todster]

Fools will always be preyed on. It's a competitive world out there. If the Nanny State could make it illegal to prey on fools I am sure they would do so. But I am sure that even the fools would object to having to wear a sign round their necks saying "I am a fool - be gentle with me."

The biggest worry in ausnick's case (he admits he is a fool) is that one day he will be counselling others.

ausnick consider yourself lucky this bloke is not the debt collector

 

[Calliope]

ausnick consider yourself lucky this bloke is not the debt collector

Nonsense. We need fools and should nurture them. As Mark Twain said;

"Let us be thankful for the fools. But for them the rest of us could not succeed."

 

[LostMyShirt]

This is some fairly idealistic banter for a 4K-5K debt.

The reality of the matter is the institution should be careful who they lend to, but if lending decreased their balance sheets look bad.

Anyone remember the GE Money debacle where they would lend any amount to any person with a high interest rate in order to secure debt, and when said person cannot pay they sell the inflated debt with the joke of an interest rate? Where is the ideology now?

OP: Your debt is peanuts. You can get away with a payment plan of probably $20 a week if need be. This should avoid CRA as well, and you won't need to go bankrupt for it.

I think all the idealistic posters out there bantering to their own ego should calm down. The guy is a student, he's got nothing - he doesn't work because study takes up a lot of time. Telling him to quit and work to pay off a measly debt is probably the STUPIDEST thing I have ever heard and I am reluctant to believe comments like that come from reason.

OP; this is so not a big deal at all man. Organize a payment plan of what you can afford. They have no choice but to take it. If they take you to court and bankrupt you, they get nothing. I don't even think a magistrate would be willing to rule on bankruptcy he most likely will advise a payment plan unless your wish is to be bankrupt.

 

[OzWaveGuy]

I wonder what would happen if you offered to pay the outstanding balance of any "debt" in exchange for the original debt instrument that you signed. Seems like a fair swap since it's that original instrument with your signature that created the "debt" in the first place. Do you think the bank/debt collector has this original instrument? I wonder what would happen if they don't have it?

Perhaps all this has something to do with why you never get a bill, only ever a statement and why a home loan is never a contract, but an "agreement". I wonder if it's because these folks are not actually creditors and they never loaned anything to begin with. Perhaps using the word "agreement" gets around the legal definition of a "contract" - a valid contract must have consideration and provide full disclosure amongst other criteria. What are they hiding, what did they actually give you?

Sorry for my questions that are clearly not in line with the assertions in this thread. Perhaps looking more closely will show that you are the creditor.

 

[Knobby22]

Nonsense. We need fools and should nurture them. As Mark Twain said;

"Let us be thankful for the fools. But for them the rest of us could not succeed."

True
Another saying for the modern age you can quote:

"A fool and his credit rating are soon parted"

The Knobby one - 2012