injustice Posted March 2, 2011 Share Posted March 2, 2011 Credit Card debts are seldom written off. Banks sell them at a fraction of balance to Debt Collection Agencies, who then try to recover the full amount. If a person clears a debt, then the loan is retired and that money goes out of circulation, until another loan is advanced. Defaulted loans remain in circulation, good for the economy! Quote Link to comment Share on other sites More sharing options...
needsleep Posted March 2, 2011 Share Posted March 2, 2011 Credit Card debts are seldom written off. Banks sell them at a fraction of balance to Debt Collection Agencies, who then try to recover the full amount. If a person clears a debt, then the loan is retired and that money goes out of circulation, until another loan is advanced. Defaulted loans remain in circulation, good for the economy! In the past couple of years through dealing with wills and helping out elderly relatives I've managed to get a couple of dozen credit card debts written off. Most of them after a death but the debts do get written off. Quote Link to comment Share on other sites More sharing options...
shermanator Posted March 2, 2011 Share Posted March 2, 2011 The banks cajoled and encouraged the financially illiterate to get up to their necks in CC debt. They exploited every ounce of ignorance with small print, fabricatons and the hard sell. IMO they deserve everything they get. I'm about to pay off the last of my credit cards, and having been pumped with massive IR's because of their greed in selling totally unsuitable products to the vulnerable and the young (18 and you are meant to be able to be all grown up about 30k for nothing - pffffffffft.) they can F off. I'm sick and tired of hearing about individual responsibility. These are powerful, manipulative organisations and this was a calculated, coercive abuse of power, lobbying and was nothing other than the usual bankers greed. The fly by nights involved were all on short term bonuses so who cares about the fallout. TOUGH. Fully agree with your post. Before the ludicrous bailing out banksters (about £1.2tn and counting) I was very careful to pay off debts. As it transpired I got into difficulty just as Brown was bailing out the Banksters, so thought f*** the lot of them and applied for a DRO - so that debt is written off not "circulating in the economy" as another poster suggests. A little heads up; when you inform the unsecured lender you're not going to pay the money back they suddenly become friendly and offer to settle for a mich lower amount. My advice; The Banksters have got away with tens of billions (which most HPCers regard as a necessary evil haha) so if you've got the access to unsecured loans, load up big time and default - CCs, personal loans, the whole lot for as much as you can. The problem is most have a Daily Mail puritan attitude and get worried by empty threats. My views was/is - the elite are clearing the tills, why not the plebs too? As it happens, I'm now living in France now where CCs are pretty rare, personal loans really rare without security and cheques are very much in vogue and treated like cash; so don't bounce cheques as you'll be called in to see your old school bank manager for a dressing down. So pleased to be out of the Anglo-Saxon 'debt is wealth' psyche that pervades Britain now. Quote Link to comment Share on other sites More sharing options...
injustice Posted March 2, 2011 Share Posted March 2, 2011 Fully agree with your post. Before the ludicrous bailing out banksters (about £1.2tn and counting) I was very careful to pay off debts. As it transpired I got into difficulty just as Brown was bailing out the Banksters, so thought f*** the lot of them and applied for a DRO - so that debt is written off not "circulating in the economy" as another poster suggests. A little heads up; when you inform the unsecured lender you're not going to pay the money back they suddenly become friendly and offer to settle for a mich lower amount. My advice; The Banksters have got away with tens of billions (which most HPCers regard as a necessary evil haha) so if you've got the access to unsecured loans, load up big time and default - CCs, personal loans, the whole lot for as much as you can. The problem is most have a Daily Mail puritan attitude and get worried by empty threats. My views was/is - the elite are clearing the tills, why not the plebs too? As it happens, I'm now living in France now where CCs are pretty rare, personal loans really rare without security and cheques are very much in vogue and treated like cash; so don't bounce cheques as you'll be called in to see your old school bank manager for a dressing down. So pleased to be out of the Anglo-Saxon 'debt is wealth' psyche that pervades Britain now. If you didn't pay the credit cards off, the money is still out there. Where's Injin? Quote Link to comment Share on other sites More sharing options...
shermanator Posted March 2, 2011 Share Posted March 2, 2011 If you didn't pay the credit cards off, the money is still out there. Where's Injin? So you mean the money is still out there because it's been securitised and those nice Banksters are busy trading it between themselves? Oh dear Quote Link to comment Share on other sites More sharing options...
injustice Posted March 2, 2011 Share Posted March 2, 2011 So you mean the money is still out there because it's been securitised and those nice Banksters are busy trading it between themselves? Oh dear No. It has been spent, the money is circulating. Quote Link to comment Share on other sites More sharing options...
needsleep Posted March 2, 2011 Share Posted March 2, 2011 Fully agree with your post. Before the ludicrous bailing out banksters (about £1.2tn and counting) I was very careful to pay off debts. As it transpired I got into difficulty just as Brown was bailing out the Banksters, so thought f*** the lot of them and applied for a DRO - so that debt is written off not "circulating in the economy" as another poster suggests. A little heads up; when you inform the unsecured lender you're not going to pay the money back they suddenly become friendly and offer to settle for a mich lower amount. My advice; The Banksters have got away with tens of billions (which most HPCers regard as a necessary evil haha) so if you've got the access to unsecured loans, load up big time and default - CCs, personal loans, the whole lot for as much as you can. The problem is most have a Daily Mail puritan attitude and get worried by empty threats. My views was/is - the elite are clearing the tills, why not the plebs too? As it happens, I'm now living in France now where CCs are pretty rare, personal loans really rare without security and cheques are very much in vogue and treated like cash; so don't bounce cheques as you'll be called in to see your old school bank manager for a dressing down. So pleased to be out of the Anglo-Saxon 'debt is wealth' psyche that pervades Britain now. I've taken a similar view, although not as extreme when dealing with finances of elderly relatives and when dealing with wills. With many of the accounts the lending was arguably predatory and not correctly underwritten. The account holders had often also been stung for PPI and other financial protection scams that in some cases didn't even cover the death of the person who had held the card. I pretty much decided in every case the CC and loan companies were going to get as little as I could possibly get away with. In the majority of cases they got nothing and they quite happily agreed to it. In other cases they accepted much reduced amounts. Only one company held out for any length of time, actually for for payment of quite a small sum on a store card issued by a firm in Sir Philip Green's empire. By taking this stance it greatly helped the surviving relatives (elderly widowers/widows) and I've got no regrets in that respect. The galling thing is knowing that the companies just wrote a lot of this off against tax having already been repaid (perhaps several times over) through the securitisation of the debts, interest payments, dodgy PPI and their own insurance against death etc.... Quote Link to comment Share on other sites More sharing options...
CharlieChuck Posted March 2, 2011 Share Posted March 2, 2011 (edited) No. It has been spent, the money is circulating. The money lent is circulating, but a similar amount of money is destroyed when the bank posts a bad debt provision or writes it off. The net effect is zero. e.g. Man A borrows £1000 spends it and can't repay it. Man B pays £1000 in interest on his mortgage The bank (eventually) has to post a loss of £1000 on the bad debt, and makes a profit of £1000 on the loan interest. These two cancel each other out. The £1000 made in interest can't be re-lent by the bank. Edited March 2, 2011 by CharlieChuck Quote Link to comment Share on other sites More sharing options...
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