Crash Trigger - Consumer Debt/banks Tightening Up!

[MarkyB]

BBC consumer debt growth reducing

Its great spin, by BBC presuming consumers are wising up! But it sounds to me like the idea of paying debt with further debt is no longer necessarily becoming a possibility! this would have meant it could have been dragged out for a another period of time, with inflation making the debt more affordable.

I hear of far TOO MANY people who are 30k + in debt, and just see no way out! paying off minimums on CC's with personal loans, which are still massive payments. But still spending on the CC's, as they have no cash to buy food, Petrol, etc.

With IVA's becoming all more popular, it sounds like the easy way out, "unemployment", the more you earn, the more you'll pay in agreement with your creditors! So there really is no point working, welcome the days of "cash in hand". At least you get a roof over your head, and money for food, and playstation 2 games ... etc.

At the end of the day, someone has to pay for all this laminated flooring?... so whos it going to be?

[A late entrance..]

At the end of the day, someone has to pay for all this laminated flooring?... so whos it going to be?

Good question - who will actually take the hit from defaulting on loans/bankrupcy? I presume it is mostly the banks, their multi billion £ profits might actually take a hit over the next few years!

[Solvent Celt]

Good question - who will actually take the hit from defaulting on loans/bankrupcy? I presume it is mostly the banks, their multi billion £ profits might actually take a hit over the next few years!

Yep it's the lenders. Their recourse in Bankruptcy is to lodge a "Proof of Debt" form.

Assuming the Bankrupt has no assets they're stuffed.

[Bear Goggles]

BBC consumer debt growth reducing

Its great spin, by BBC presuming consumers are wising up! But it sounds to me like the idea of paying debt with further debt is no longer necessarily becoming a possibility! this would have meant it could have been dragged out for a another period of time, with inflation making the debt more affordable.

I hear of far TOO MANY people who are 30k + in debt, and just see no way out! paying off minimums on CC's with personal loans, which are still massive payments. But still spending on the CC's, as they have no cash to buy food, Petrol, etc.

With IVA's becoming all more popular, it sounds like the easy way out, "unemployment", the more you earn, the more you'll pay in agreement with your creditors! So there really is no point working, welcome the days of "cash in hand". At least you get a roof over your head, and money for food, and playstation 2 games ... etc.

At the end of the day, someone has to pay for all this laminated flooring?... so whos it going to be?

Interesting.

It states in the article that consumer credit growth fell to 9.8% in November (I'm guessing this is a YOY figure).

Seeing that wage growth is around 4.5%, then unless I'm missing something (which I may be) then 9.8% must surely be unsustainable.

[Minos]

I wouldn't bank on it that the banks are restricting credit. I was just in my local Natwest in Milton Keynes. The woman at the cashier next to me was paying in a cheque or something. The lad serving her asked her if she had "talked" to anyone about increasing the credit limit on her current account. She said it was increased ten days ago.

Not to miss an opportunity he then said they were having a loan sale and was she interested. She replied that she wouldn't be accepted as she had already defaulted on a consolidation load they provided and her credit rating was shot-up. She had already applied for another loan at a different branch and was turned down.

Not to give up he said that he suspected if she tried here that she would be successful. Fortunately for her she was already late getting back to work from her lunch break so didn't have time.

Banks are such greedy c*ck suckers.

I bet they would sign you up for a loan faster than it took for the cashier to find some money to give to me - it took half an hour to give me my own money.

[Lovely Lolly]

I wouldn't bank on it that the banks are restricting credit. I was just in my local Natwest in Milton Keynes. The woman at the cashier next to me was paying in a cheque or something. The lad serving her asked her if she had "talked" to anyone about increasing the credit limit on her current account. She said it was increased ten days ago.

Not to miss an opportunity he then said they were having a loan sale and was she interested. She replied that she wouldn't be accepted as she had already defaulted on a consolidation load they provided and her credit rating was shot-up. She had already applied for another loan at a different branch and was turned down.

Not to give up he said that he suspected if she tried here that she would be successful. Fortunately for her she was already late getting back to work from her lunch break so didn't have time.

Banks are such greedy c*ck suckers.

I bet they would sign you up for a loan faster than it took for the cashier to find some money to give to me - it took half an hour to give me my own money.

I sincerely hope the banks suffer more this time around. Natwest is one of the biggest offenders. Up until recenlty I used the Paddington branch reguarly, the queue would be almost out the door and the hapless tellers would be busily promoting their loans and mortages to every customer when people were literally turning puce waiting in line. One guy lost it one day and shouted at one of the staff to just get on with serving him. I don't blame the staff, no doubt they are under orders to drum up business but I got so fed up with being asked if I wanted a mortage/loan I moved to an online bank.

LL

[IMupNorth]

The trouble with consumer debt is that 80+% or so of the people with problems do not have houses.

So they can all go bankrupt and it won't have a significant effect on forced sales and reducing house prices.

Most of the people who are so bad at manging their money are tenants, the two go hand in hand if B of England surveys are to be believed.

[The Masked Tulip]

ABC News in the US last night had an item about credit debt. In the US credit card companies as of this month are DOUBLING the minimum repayment on credit cards. This is because they worked out that they were never going to get their money back from about 35 MILLION credit card holders.

Some analysts commented that such people are still unlikely to ever pay off their bills and that 'millions' would be forced into bankruptcy this year when the doubling of minimum repayments hit home.

[Harry Sacks]

Good question - who will actually take the hit from defaulting on loans/bankrupcy? I presume it is mostly the banks, their multi billion £ profits might actually take a hit over the next few years!

The whole point of fractional reserve banking is to lend 10x more than you have.

Banks get rich by lending made up money and repaid with real money.

Banks have lent a lot of magic money these last few years, they've made it cheap and popular.

They will do as they have done since the time of Christ, restrict money supply into the economy with the same ease with which they increased it.

This will restrict TRADE in goods and services, create loan defaults and repo's. The banks get keys to tangible assets when they repo your home, they can sell it.

Remember, for every mortgage default there are 100 other mortgages being paid off at 2-3 times the original amount loaned.

The banks never lose out.