100% Debt Discharge Decision In Greece Sets Troubling Precedent For Local Banks

[interestrateripoff]

http://www.zerohedge.com/news/100-debt-discharge-decision-greece-sets-troubling-precedent-greek-banks

A very disturbing precedent, for the already frayed domestic financial system, was set in Greece over the past few days, where as the linked story from On-News.gr explains, an unemployed Greek woman who owed a little over 26,000 euros to two banks, Eurobank and National, received a full debt discharge on her outstanding loans. As the blog logical concludes, this decision will probably be adhered to in thousands of similar cases. Furthermore, it should be noted the woman had a perfect payment record for 18 years, and only fell behind when she lost her job. Imagine the sheer panic that would ensue if a comparable legal decision vis-a-vis ordinary consumer debt were to occur in the US - that would be a supreme court resolution for the ages. In the meantime in Greece, a one-two punch arrives: deposits being drained and moved overseas, and bad loans being outright erased from the balance sheet by court order.

http://www.on-news.gr/2011/10/blog-post_6760.html

Any Greek speakers confirm the facts on this story? Looks like the Greeks will soon be shafting the international bankers even more, if this case does indeed set a precedent I can imagine most Greek judges will be all too happy to follow.

[okaycuckoo]

We have effectively the same situation here on CC debts - alot of them are being paid off at token rates, over 50+ years with interest frozen (although I can never tell if the freeze is permanent).

It's a strange situation where courts are handing out judgments on the one hand and on the other saying that the judgment shouldn't be enforced. The Greek thing seems to be no judgment at all.

[guitarman001]

So her debt gets wiped off?

I will be incredibly p!ssed if that happens here (I'm angry about it happening in this instance!), whether in the form of bank/credit card debt or mortgage debt. Can you imagine it? The slap to the face of all us suckers? Might as well load up now - go for that £500k mansion you've always wanted.

[IP Newcomer]

So her debt gets wiped off?

I will be incredibly p!ssed if that happens here (I'm angry about it happening in this instance!), whether in the form of bank/credit card debt or mortgage debt. Can you imagine it? The slap to the face of all us suckers? Might as well load up now - go for that £500k mansion you've always wanted.

Actually this is a real blow not to savers but to borrowers. Many borrowers are not able to save so need debt to either make large purchases or even live day to day.

And a debt amnesty will mean no large scale consumer lending for a generation.

The people who are able to save will be the ones with the ability to raise the capital.

This will be so deflationary that the government will not do this unless the place is ready to explode.

Instead it will be the printing press.

[jonb]

http://www.zerohedge...ent-greek-banks

http://www.on-news.g...-post_6760.html

Any Greek speakers confirm the facts on this story? Looks like the Greeks will soon be shafting the international bankers even more, if this case does indeed set a precedent I can imagine most Greek judges will be all too happy to follow.

Looks like the Greek equivalent of the Debt Relief Orders, IVAs and Bankruptcy proceedings that you get here, and in most countries that have abolished debtors prisons.

[R K]

Very sensible.

Banks need to clean up their b/sheets as fast as possible.

Same as German/French banks need to write off unpayable Greek debts asap and recap.

Zombie banks carrying unpayable debts are no use to anyone.

[scrappycocco]

Printing press or debt discharge, all a slap in the face for decent people that don't borrow what they can't afford.

Where is this bloody recession and resultant repossessions so us decent people can get an affordable property.

[Fairies Wear Boots]

Doesn't having a debt discharge totally ruin your credit rating? And lot's of people here could do it, but don't?

[wjk]

Very sensible.

Banks need to clean up their b/sheets as fast as possible.

Same as German/French banks need to write off unpayable Greek debts asap and recap.

Zombie banks carrying unpayable debts are no use to anyone.

I like the Biblical system of debts being forgiven after 7 years. You can be sure lenders would be a lot more careful under such terms.

[Pent Up]

We have effectively the same situation here on CC debts - alot of them are being paid off at token rates, over 50+ years with interest frozen (although I can never tell if the freeze is permanent).

It's a strange situation where courts are handing out judgments on the one hand and on the other saying that the judgment shouldn't be enforced. The Greek thing seems to be no judgment at all.

You're right it effectively already does happen here. I know a guy who borrowed around £20k didn't pay it back and now has an agreement were he pays £1 per month.

[Englebert]

I think it's a good idea. Let's face it, in many cases, its. not the debt that is the problem - its the rip off interest rates these cc gangsters charge. It could well be the case that most people over time have probably paid off all of the money they have actually borrowed from the cc gangsters but still find themselves in debt through extortionate interest rates. Good old usury! Of course, it would be a good idea if people didn't use cc's in the first place but hey welcome to rip off Britain. Some people I know - in work but low paid job - use them to put food on the table. Balls to the cc gangsters, I say...

[Wig]

I think it's a good idea. Let's face it, in many cases, its. not the debt that is the problem - its the rip off interest rates these cc gangsters charge. It could well be the case that most people over time have probably paid off all of the money they have actually borrowed from the cc gangsters but still find themselves in debt through extortionate interest rates. Good old usury! Of course, it would be a good idea if people didn't use cc's in the first place but hey welcome to rip off Britain. Some people I know - in work but low paid job - use them to put food on the table. Balls to the cc gangsters, I say...

out of interest do these people smoke/drink/are obese or have sky tv/mobile phone contract/other unessential modern 'essentials'?

Genuinely interested in the perception of breadline here.

[anonguest]

I like the Biblical system of debts being forgiven after 7 years. You can be sure lenders would be a lot more careful under such terms.

On that note it is, perhaps coincidentally, interesting to note that unsecured debts effectively 'die' after 6 years of non-payment and banks are, so I understand, these days required to keep personal account details for 7 years(?) after an account is closed. Rather similar time frames to the biblical figure. Were these numbers chosen arbitrarily? or based on sub-conscious mindset by policy makers and others involved in these matters. Then again mush cof our present day judicial/political/cultural systems are ultimately founded in Judeo-Christian concepts.

I have yet to find an explanation as to why secured debt (typically mortgage debt) is treated differently - and has a 'life' of a whopping 12 years in the event of default......

[LiveinHope]

After food, housing (I see renting as acceptable provision of housing) and clothing needs are met, and the state provides a reasonable health and education system, and welfare, am I wrong in having no sympathy for people who have debts as a result of booze, fags, iphones, ipods, Plasma TVs, cameras, boats, etc and feeling fairly p1ssed off if they get away with it by having their debts written off ?

[anonguest]

You're right it effectively already does happen here. I know a guy who borrowed around £20k didn't pay it back and now has an agreement were he pays £1 per month.

IF accurate and true then after 25 years only £300 will have been paid, just 1.5% of the original debt - an amount so low as to be close to total non-payment.

Obviously by that stage, when such an offer is made to the debtor, the original debt will have been written off by the original lendor and since sold on (perhaps several times?) for pennies in the pound to 'debt collection' companies. Presumably the debt would have been purchased by them at such low prices that, even at such seemingly ludicrously low payment rates, the company still turns a profit?? Surely? After all they're not in the charity business?

However, at such low payment rates even I would personally advocate to such a debtor to just completely walk away from the debt by that stage. By continuing to cooperate/pay, even at £1 per month, all tthey are doing is legally keeping the debt 'alive' for effectively (at those rates of payment) the rest of their life - which I find morally repugnant.

One possible strategy/reason I can see for debt collection companies willingly agreeing to such ludicrously low payment rates is precisely because by doing so the debt stays alive till death. They may well be working under the assumption that, on average, most peoples present personal difficulties preventing complete payment of the debt 'today' are just temporary - and at some point in the future the debtors circumstances will improve and they can then revisit him/her to make renewed demands for the full payment. Even if 20 years have elapsed, the debtor cannot refuse as he/she will have been unwittingly been keeping the debt 'alive' all that time by paying just £1 per month.

Edited October 3, 2011 by anonguest

[okaycuckoo]

You're right it effectively already does happen here. I know a guy who borrowed around £20k didn't pay it back and now has an agreement were he pays £1 per month.

The latest figure I have is of 500,000 debt management plans in this country.

My view is that debt is never going to be paid and the banks should be wiped out. But the management plans allow them to pretend the loans are still being serviced.

I'd prefer to see bankruptcy for all these people. They'll still hang on to their houses so long as there's no equity.

[anonguest]

After food, housing (I see renting as acceptable provision of housing) and clothing needs are met, and the state provides a reasonable health and education system, and welfare, am I wrong in having no sympathy for people who have debts as a result of booze, fags, iphones, ipods, Plasma TVs, cameras, boats, etc and feeling fairly p1ssed off if they get away with it by having their debts written off ?

In my opinion no, broadly speaking you are not wrong for having no sympathy - although each case must be taken on its merits.

But there is consequence in that such people, by and large, suffer from having credit withdrawn from them for at least 6 years. Given the 'dependancy' of modern life on access to credit, this is no small 'punishment'. Such action forces such defaulters in to 6 years (or more!) of relative social hardship.

[winkie]

I think it's a good idea. Let's face it, in many cases, its. not the debt that is the problem - its the rip off interest rates these cc gangsters charge. It could well be the case that most people over time have probably paid off all of the money they have actually borrowed from the cc gangsters but still find themselves in debt through extortionate interest rates. Good old usury! Of course, it would be a good idea if people didn't use cc's in the first place but hey welcome to rip off Britain. Some people I know - in work but low paid job - use them to put food on the table. Balls to the cc gangsters, I say...

If you don't like the charges don't buy it......no one is forced to get into debt...and the lenders who lend to those who they know can't repay to earn a fast short-term buck deserve to lose their capital....both are guilty as each other imo......the trouble is they can't help themselves, wonderful thing temptation.

[Bloo Loo]

Very sensible.

Banks need to clean up their b/sheets as fast as possible.

Same as German/French banks need to write off unpayable Greek debts asap and recap.

Zombie banks carrying unpayable debts are no use to anyone.

indeed, as the banker says to his debtor: "Now, Mrs Stone, how are we going to extract your Blood?"

[LiveinHope]

In my opinion no, broadly speaking you are not wrong for having no sympathy - although each case must be taken on its merits.

But there is consequence in that such people, by and large, suffer from having credit withdrawn from them for at least 6 years. Given the 'dependancy' of modern life on access to credit, this is no small 'punishment'. Such action forces such defaulters in to 6 years (or more!) of relative social hardship.

But does life need credit in general if you realise you don't need to have iphones, ipods, plasma TVs etc. May be I am just fortunate in that I have never had debt. But maybe it is because I have never bought anything that I cannot afford, including a house :-)

[okaycuckoo]

But does life need credit in general if you realise you don't need to have iphones, ipods, plasma TVs etc. May be I am just fortunate in that I have never had debt. But maybe it is because I have never bought anything that I cannot afford, including a house :-)

Can you afford children?

[Wait & See]

We should just see mass default. If 20 million people tell the banks to beat it, it's game over.

I always laugh when people think they have no power. The dirty banks would all go to the wall and the people would laugh.

I suppose you have to ask yourself what the banks were doing giving people on 20k per year 30k of credit on shitty plastic cards that they would have no way of paying back.

Utter banker muppets.

[LiveinHope]

Can you afford children?

I think so, and interestingly, so can my very close friends who all would be called 'working class', probably.

But my comments are my experience and others experiences may differ. I've never lived in London for example. However, I still maintain that you don't need much of the stuff that people take on debt to acquire.

None of my close friends children have access to TVs (3 families) or much of the other 'stuff' and they go to school and mix with 'normal' kids too, although it probably helps being rural; it's probably harder in an urban setting. I would say that these children can occupy themselves and have excellent imaginations and curious minds and practical abilities. Surprisingly, there are few arguments about what 'toys' they lack because none of them have these things.

Amusingly, one friend's teenage son wants to go into the film industry and has amassed one of the most extensive DVD collections I've seen....he cannot watch a single one of them.

Edited October 3, 2011 by LiveinHope

[wonderpup]

Genuinely interested in the perception of breadline here.

Yes I too wake up sweating in the night sometimes- haunted by the possibility that there are people living on low wages who might not be leading degraded and miserable lives.