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Barclaycard Debt Jubilee * WARNING - Mumsnet Content*

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Mmmmm interesting that Barclaycard find it cheaper to wipe the debt off instead of selling it on to a third party debt collection company 

Finance getting tighter?

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35 minutes ago, Si1 said:

Mmmmm interesting that Barclaycard find it cheaper to wipe the debt off instead of selling it on to a third party debt collection company 

Finance getting tighter?

In some ways it's recognition that they were at least partly responsible in the first place because, as it says, they fell down on their own standards.

Whether this pressages a more general debt amnesty is a moot point: if debt can't be repaid it won't be but they cannot absolve themselves of the moral hazard here.

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All business that thrive on their customers using debt to purchase their goods or services can only hope that those who have no reasonable expectation to be ever be able to repay what they borrowed get more....they would go out of business pretty pronto if more debt/credit was not further extended to them.......they don't care if it is defaulted on, never paid back......one person's debt is another person's wealth......gotta keep borrowing and spending, keeps the economy going.😉

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29 minutes ago, winkie said:

All business that thrive on their customers using debt to purchase their goods or services can only hope that those who have no reasonable expectation to be ever be able to repay what they borrowed get more....they would go out of business pretty pronto if more debt/credit was not further extended to them.......they don't care if it is defaulted on, never paid back......one person's debt is another person's wealth......gotta keep borrowing and spending, keeps the economy going.😉

That's why PPI pay outs were such a boost to the economy - free cash handouts to people who are known to spend beyond their means

Edited by rantnrave

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If a £4,000 debt was being paid off at £5 per month basically it's effectively written off anyway from Barclaycard's perspective.  Almost might as well cut the admin and just end it.

 

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BBC News

The Insolvency Service says it has issued its 250,000th Debt Relief Order (DRO) - a form of insolvency that is used by more women than men.

Introduced in April 2009, DROs allow people with debts of less than £20,000 and minimal assets to write off debts without a full-blown bankruptcy.

They have proved popular owing, in part, to the fact nearly all are granted within 48 hours, and debts are written off after a year. However, a DRO does not cover every kind of debt, and it stays on someone's record for six years.

Last year, 65% of these orders were granted to women.

Applications go through independent debt advisers. Many charities offer free advice and can explain the long-term effects of the various forms of insolvency.

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2 hours ago, crouch said:

In some ways it's recognition that they were at least partly responsible in the first place because, as it says, they fell down on their own standards.

Whether this pressages a more general debt amnesty is a moot point: if debt can't be repaid it won't be but they cannot absolve themselves of the moral hazard here.

There isn't moral hazard, because it's not a socialisation of debt. Both Barclays and other lenders will surely take this into account in future lending standards ??

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Having known someone who ended up bankrupt due to feckless/reckless behavior it is bad they could wriggle out of it, but then I also didn't have much sympathy with the out-of-pocket high street bank for lending this money out anyway.

More so as a taxpayer am annoyed that I was forced to rescue this same bank.

That said I would change the way negative equity is handled post repossession so that the lender takes a bigger (if not 100%) risk on primary residence property value falling, as a mechanism to limit irrational lending alongside better support for shareholders to hold short term-ist directors to account.  Rant over!

Edited by nightowl

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3 hours ago, Si1 said:

There isn't moral hazard, because it's not a socialisation of debt. Both Barclays and other lenders will surely take this into account in future lending standards ??

The problem is when people see this they don't see Barclay's fault; all they see is someones "got away with it" so maybe I should chance it even if I've no cause. Thin end of the wedge.

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2 hours ago, crouch said:

The problem is when people see this they don't see Barclay's fault; all they see is someones "got away with it" so maybe I should chance it even if I've no cause. Thin end of the wedge.

That's not a problem. The lenders should compensate for higher risk by discriminating and charging more.

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2 hours ago, crouch said:

The problem is when people see this they don't see Barclay's fault; all they see is someones "got away with it" so maybe I should chance it even if I've no cause. Thin end of the wedge.

And this is exactly what I'd love to do, if I only knew how to go about it (Having never had a loan or credit card in my life I wouldn't really know where to begin or how to successfully get all my debts subsequently written off)  

 

 

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I had something similar with Smile PLC a couple of years ago (although I was never behind with payments).  I had two personal loans with them (the second one paying off the first and going forward).  They had been sending me regular statements but apparently the wording or information on them did not meet the terms of the Consumer Credit Act.  They basically wrote off a big chunk of the interest and I ended up saving about 2 or 3 grand.

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Sounds like the FCA were behind this - they allowed someone to get into debt to the extent that they could not reasonably repay it and the bank knew it but allowed them to extend the debt anyway. The regulator has cracked down on this kind of lending and forced the bank to write off the debt.

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18 hours ago, rantnrave said:

That's why PPI pay outs were such a boost to the economy - free cash handouts to people who are known to spend beyond their means

Helicopter money.....the people's QE.

Not just ordinary individuals that live beyond their means though is it..... corporations, LTDs and all sorts of others do exactly the same.....par for the course.......PPI was an expensive add on insurance that was additional expense on top of the interest, often an insurance that was not an assurance....😉

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Could be linked to new rules designed to prevent large debts being rolled over indefinitely on cards, a category of debtor the FCA calls 'persistent debt'

https://www.theguardian.com/money/2018/jun/02/credit-card-spending-terms-conditions-rbs-natwest

Most banks will just stop you spending more then bring your limit down as (if) you start repaying, but perhaps Barclays have taken a view about a specific group of customers? 

Interestingly the last time Barclaycard aggressively wrote of customer debt was in the run-up to the GFC......

https://www.thetimes.co.uk/article/barclays-to-write-off-15bn-in-credit-card-debt-as-bankruptcies-hit-record-level-l36stwzwwwp

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On 16/11/2018 at 05:25, nome said:

Looks like Barclaycard are rewarding the feckless with their own little debt jubilee.

Which is nice.... 

https://www.mumsnet.com/Talk/legal_money_matters/3424718-Have-Barclaycard-written-off-my-debt

More like Barclay's rewarding themselves by dropping the pain of collecting 5 quid a month to collect 4000 -  the whole thing there must have some "nice" memory on top of plain math. I guess you can also imagine what chances the "lucky" mum has of ever getting a credit line of any sorts or, indeed, getting into any contract where credit checks need carrying out. Hardly anything to celebrate.

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  • 261 Brexit, House prices and Summer 2020

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      • down 5% +
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