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Debt Collection Work Up Over 300%

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http://business.timesonline.co.uk/tol/busi...icle2283028.ece

From The Sunday Times
August 19, 2007
Debt collectors’ workload triples
Dominic O’Connell
THE amount of debt passed to collection agencies has
tripled
in the past six years to £21 billion, with more than
20m individual cases
being handled in the past year alone.
The increase underlines the sharp rise in personal indebtedness in Britain, and a growth in the use of collection agencies to recover bad loans.
A report by the Credit Services Association (CSA), which speaks for 291 debt collection companies, found that of the £21 billion, £6 billion had been sold on to agencies for collection.

Should see repossession rates begin to skyrocket now that HPI is over. :o

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http://business.timesonline.co.uk/tol/busi...icle2283028.ece
From The Sunday Times
August 19, 2007
Debt collectors’ workload triples
Dominic O’Connell
THE amount of debt passed to collection agencies has
tripled
in the past six years to £21 billion, with more than
20m individual cases
being handled in the past year alone.
The increase underlines the sharp rise in personal indebtedness in Britain, and a growth in the use of collection agencies to recover bad loans.
A report by the Credit Services Association (CSA), which speaks for 291 debt collection companies, found that of the £21 billion, £6 billion had been sold on to agencies for collection.

Should see repossession rates begin to skyrocket now that HPI is over. :o

I wish you didn't seem to be so pleased about it.

A lot of peoples' lives are going to be devastated.

It is the lenders who should suffer - not the poor saps who bought into the impossible dream.

That is why I have no hesitation in recommending bankruptcy to people as a viable option

Edited by Mr Yogi

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It is the lenders who should suffer - not the poor saps who bought into the impossible dream.

Nonsense. The lenders are indeed guilty as sin and should be severely penalised for the havoc that their irresponsible practices have wreaked on our society - but people who overstretched themselves financially must face the consequences of their own actions, too.

I am not saying they only have themselves to blame. I am saying that they are by no means blameless, and that simply letting everyone off the hook and washing away all the bad debts is not the answer. Society as a whole will suffer while people can walk away from the legal obligations of their own decisions.

RB's post didn't come across to me as gloating at all. (Well, maybe just a tiny little bit. :rolleyes: )

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RB's post didn't come across to me as gloating at all. (Well, maybe just a tiny little bit. :rolleyes: )

I think we are happy, because we were right all along. Things are happening almost exactly as expected (just a little faster!)

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FWIW I think if things get nasty enough quickly enough even so-called debt collection agencies could well end up up to their necks in the shit. They're buying up bad debt at the moment in the hope of making a killing but what happens next when there's not nearly enough to recover? Who's gonna buy up the bad debt then?

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I wish you didn't seem to be so pleased about it.

A lot of peoples' lives are going to be devastated.

It is the lenders who should suffer - not the poor saps who bought into the impossible dream.

That is why I have no hesitation in recommending bankruptcy to people as a viable option

Sorry but whilst I have sympathy for people who find themselves in debt through unforeseen events, the current upsurge in debt is as much down to uninformed and/or greedy borrowers as it is to lenders who, awash with cheap sources of money, were giving it out hand over fist.

There is such a concept as personal responsibility. Just because something is there to be taken advantage of, doesn't mean that you have to do so.

And bankruptcy is there for cases when people find themselves so far into debt as to be more or less slaves until they die - not for clueless/greedy numpties who borrowed to live the good life to use as a get-out clause to avoid their debts.

If enough people abuse the system (as I'm sure they will) then we face seeing tougher conditions imposed for bankruptcy which will punish those people who actually need to use the system as opposed to those taking the p1ss from the rest of us who will have to chip in to pay off their debts.

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It's very sad for those who are caught up in this but I'm afraid they must suffer for their poor financial decisions.

At the very worst they face bankruptcy - not a lifetime of debt slavery.

It would be far worse if people were allowed to make poor financial decisions (like buying a poor quality house at a ludicrous price with a variable rate mortgage over 35 years) with no consequences.

I just hope that people can keep their situation in perspective and not do anything stupid.

Lets resolve not to let such a ridiculous property bubble inflate again.

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Lets resolve not to let such a ridiculous property bubble inflate again.

What would you suggest? We all link hands in a circle and solemly promise to smash our neighbours' TVs whenever Phil & Kirsty come on screen? We go and parade outside building societies with placards reading "Mortgages are Slavery"? We lobby the government to build ten times as many houses as we actually need, just to be on the safe side?

Seriously, how can I or anyone prevent a property bubble in future?

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People have only themselves to blame. I myself have been offered money when I have been in the bank- my first question "Do I have to pay it back?", "Yes of course!" they answer, "then no thank you" I say to them.

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What would you suggest? We all link hands in a circle and solemly promise to smash our neighbours' TVs whenever Phil & Kirsty come on screen? We go and parade outside building societies with placards reading "Mortgages are Slavery"? We lobby the government to build ten times as many houses as we actually need, just to be on the safe side?

Seriously, how can I or anyone prevent a property bubble in future?

Letting your MP know how you feel on the issue would be a start.

Demand restrictions on lending multiples, second homes, capital gains tax on property sales - there are many measures a government could take to nail this once and for all.

Holding hands and demonstrating wouldn't hurt either :huh:

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I wish you didn't seem to be so pleased about it.

A lot of peoples' lives are going to be devastated.

It is the lenders who should suffer - not the poor saps who bought into the impossible dream.

That is why I have no hesitation in recommending bankruptcy to people as a viable option

The lenders - the likes of us who have money on deposit in the bank.

I hope you do recommend bankruptcy, as it will totally screw the feckless over for years to come. Do you warn them about the difficulties of getting paid into a frozen bank account?

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Bankruptcies & IVA's could become a less attractive option in the near future. Simply because we know that Credit will be given less freely in the future by Banks etc...

I imagine those people who in the past could get a mortgage with a bankruptcy behind them, will all of a sudden find it close to impossible.

End result:

Less people taking IVA's and Bankruptcy +

Those that take this option will not being able to borrow money for the next decade at least.

= Less money swilling around for ridiculous property prices for people that can't really afford it.

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The lenders - the likes of us who have money on deposit in the bank.

I hope you do recommend bankruptcy, as it will totally screw the feckless over for years to come. Do you warn them about the difficulties of getting paid into a frozen bank account?

First advice given to a bankrupt is to open a new account and get their wages paid into it. Hardly an earth shattering inconvenience is it?

Most are only too relieved to see the back of their overdrawn "frozen" account.

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20 million individual cases is a huge amount. Like a significant proportion of the adult population (50% ??? Is that right? TBH I'm not at all sure).

So anyone have any ideas what constitutes an "individual" case? I'm guessing that there must be a proportion of claims against businesses in that, and multiple cases against some individual persons.

Even so, it's a truly frightening figure. I guess it's not so surprising given so many people don't have access to even a months salary worth of savings, in which case it only takes a job loss to cause defaults.

Ideas welcome ....

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First advice given to a bankrupt is to open a new account and get their wages paid into it. Hardly an earth shattering inconvenience is it?

Most are only too relieved to see the back of their overdrawn "frozen" account.

Thank you Solvent Celt

Your informed input on matters of insolvency is always welcome.

It is a total myth that bankrupts cannot open a bank account - of course they can.

Banks were pressured into offering basic bank accounts to pretty well anyone so that the government could pay benefits and pensions directly instead of via post offices. These accounts, which offer a debit/cash card but no overdraft facility or cheque book are also available to bankrupts. And why shouldn't they be?

Most bankrupts have no desire for more credit once they are discharged. Once one has waved goodbye to the debt burden it is suprisingly easy to live within one's means and for most it proves to be a liberating experience.

My guess too, is that by the time a trough in house prices has been reached and things start to pick up again banks will be all too happy to look at offering mortgages to ex-bankrupts who have kept their noses clean for a number of years. They will undoubtedly be a better risk than they were the first time round.

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Guest happy?
20 million individual cases is a huge amount. Like a significant proportion of the adult population (50% ??? Is that right? TBH I'm not at all sure).

So anyone have any ideas what constitutes an "individual" case? I'm guessing that there must be a proportion of claims against businesses in that, and multiple cases against some individual persons.

Even so, it's a truly frightening figure. I guess it's not so surprising given so many people don't have access to even a months salary worth of savings, in which case it only takes a job loss to cause defaults.

Ideas welcome ....

I suspect that 'indivdual case' means individual debt - with many of these debts being multiple debts in one person's name.

More interesting is what % of these debts were obtained fraudulently - I'm not simply talking of those who mis-state their income but rather of people whose identities have either been stolen or created to cream cash from lenders too willing to lend and lax with credit checks.

Many companies who have bought debts will find out the hard way that it's not just a case of putting the screws on the prodigal but realising the person simply doesn't exist and the money has long since been magicked away. Perhaps these frauds were committed by the original lenders' own employees aware of weaknesses in their system.

Such stories will be bread and butter in the national press over the next year or so.

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I hate this let's all feel sorry for the poor indebted crap. I was in the market for a new car recently for when I am back in the Uk to save me renting from Avis prestige all the time (which I see as wasted money) Anyway the bank (barclays) said I could have upto 135 grand based on my account and history. What did I buy? A 28 grand 03 plate M3 cab. Was I tempted by the Gallardo? Oh yes of course.

The point is we all have choice. No lender forces you to borrow anything so you cant blame them when they make borrowing easy as you still have the choice to sign or not to sign. Just like we all have the choice to spend all we earn or try and save some each month.

Feeling sorry for the indebted is just another symptom of the socialist luvvy dovey Nuw labour attitude as far as I am concerned.

PS

Of course I do feel sorry for people who through no fault of their own lose their job and end up in financial difficultys. But this is vastly different to what we see today with most of the Uks indebted! Holidays, cars, big flash houses!

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Aside from the debt collectors, I've been interested for a number of years in becoming a debt counsellor.

I even went as far once as going into a CAB as I believed if I volunteered for them, then I'd be in a position to put myself forward for training to do debt counselling. But the CAB was only open a few hours during office hours and I'd have had to go 25 miles for a week's training. So I didn't start.

I've looked again this week and I wondered if anybody could advise me from here ....

How do I become a debt counsellor?

What are the stages?

Timescale?

Costs?

Routes in?

Types of organisations that hire?

Types to aim for, types to avoid?

Is it a goer?

:)

Thanking you in advance for an informed and speedy response.

P.S. My motive is to help, rather than profit from the situation people find themselves in.

Edited by ScaredEitherWay

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What would you suggest? We all link hands in a circle and solemly promise to smash our neighbours' TVs whenever Phil & Kirsty come on screen? We go and parade outside building societies with placards reading "Mortgages are Slavery"? We lobby the government to build ten times as many houses as we actually need, just to be on the safe side?

Seriously, how can I or anyone prevent a property bubble in future?

Housing bubbles could be prevented by:

Including house prices in the CPI so that if HPI picks up so do interest rates - a kind of self correcting mechanism.

Taxing ownership of second homes - it is immoral that people 'own' portfolios of property whilst many young people are forced to live with their parents.

Tightening and enforcing lending criteria - no more than 3.5 x income for anyone.

Applying capital gains tax to property.

It would be eay to do but then politicians and the city wouldnt be able to exploit the bubble for their own ends.

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I wish you didn't seem to be so pleased about it.

A lot of peoples' lives are going to be devastated.

It is the lenders who should suffer - not the poor saps who bought into the impossible dream.

That is why I have no hesitation in recommending bankruptcy to people as a viable option

Sorry Yogi, can't agree with that one... yes they were poor saps, and yes they were conned by the lenders however it is the prudent who didn't indulge in holidays, home makeovers, massive mortgages and new cars in the drive who end up underwriting the 'poor saps' who did: the saps get to have their cake and eat it, and the prudent loose whichever way they play it! This may be the poor sap's opportunity to learn about cause and effect.

I know life's not fair, but it is doubly unfair to forgo the luxuries whilst paying for some other feckless bugger to enjoy them!

TD

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The 'whose to blame' argument AGAIN...

It takes two to tango but culture and the media have been a very influential third party in creating the 'gotta have it' culture which has given rise to the truly horrendous UK personal debt statistics.

Wait a minute, someone is missing from this thread...

ERIIIIIIIIIIIIC!!!!

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The 'whose to blame' argument AGAIN...

It takes two to tango but culture and the media have been a very influential third party in creating the 'gotta have it' culture which has given rise to the truly horrendous UK personal debt statistics.

Wait a minute, someone is missing from this thread...

ERIIIIIIIIIIIIC!!!!

Having spoken to many "consumer bankrupts" over the years it's pretty clear that media, magazines etc have a huge impact on peoples perceptions on debt and the value of money. Many young people aspire to a totally unrealistic celebrity champagne lifestyle on a Tizer budget.

The concept of living within your means is alien to many young people. Student loans, stupid house prices, store cards, 0% finance all make huge levels of debt seem normal.

Those who are feeling sorry for the lenders should remember that in very many cases the borrowers have paid off the principle - sometimes many times over. In many cases the goods purchased on credit are themselves hugely overpriced so it's a double whammy. Look at the APR on most store cards.

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Having spoken to many "consumer bankrupts" over the years it's pretty clear that media, magazines etc have a huge impact on peoples perceptions on debt and the value of money. Many young people aspire to a totally unrealistic celebrity champagne lifestyle on a Tizer budget.

The concept of living within your means is alien to many young people. Student loans, stupid house prices, store cards, 0% finance all make huge levels of debt seem normal.

Those who are feeling sorry for the lenders should remember that in very many cases the borrowers have paid off the principle - sometimes many times over. In many cases the goods purchased on credit are themselves hugely overpriced so it's a double whammy. Look at the APR on most store cards.

Totally agree. I've suggested in other threads on this same subject that education is the key to changing attitudes in the long term.

Our kids need to learn the value of money and the REAL consequences of debt from an early age (like when I was a kid).

A banking system based upon debt was truly a shocking creation and a society driven by greed and false riches is now paying for this.

If and when the banks return to moral and sensible lending practices, in the longer term it will have beneficial effects for ALL of society.

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Housing bubbles could be prevented by:

Including house prices in the CPI so that if HPI picks up so do interest rates - a kind of self correcting mechanism.

Taxing ownership of second homes - it is immoral that people 'own' portfolios of property whilst many young people are forced to live with their parents.

Tightening and enforcing lending criteria - no more than 3.5 x income for anyone.

Applying capital gains tax to property.

It would be eay to do but then politicians and the city wouldnt be able to exploit the bubble for their own ends.

I think we pay enough tax in this crappy country already. Why should you be taxed on your home when you sell ? Are you a commie ?

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It is clear from some of the posts on this thread that some people have never been in a situation where they are unable to service their debts, for whatever reason, and have no concept at all of the effect that can have on an individual, his family, his relationships etc.

I am surmising, but could be wrong, that some of these people have either never had children, lost their job, had a business go bust or got on the wrong side of a debt collection agency.

If they had they may be a little more circumspect in their comments, and a little less aggressive in their attitude to people who find themselves in that situation.

Bankruptcy is not an easy option and can have ongoing consequences.

I think it is not helpful either to suggest that banks whose customers have ended up in bankruptcy are the one's who suffer, or their more prudent customers. The banks make money hand over fist through borrowers and nothing at all from customers in credit. It is quite likely that a bad debt has already been effectively repaid, especially if it is unsecured, long before it goes "bad".

The banks know exactly what they are doing, how much bad debt they can handle and build that into their profiling and lending models.

In many cases, the customers bombarded with credit card offers, increased credit limits, credit card cheques, unsecured loan offers, consolidation loans, etc etc are much less well informed about the products they are buying and do not have a real understanding of the consequences of compound interest rates of say 17.9% over time. Often these marketing offers will drop through the door at a time when people are already in financial difficulties. Sometimes this is through profligacy, often times it is not.

The solution to this problem has already been covered above:

* Regulated lending restrictions

* An end to uncovered IO mortgages

* An end to off-balance sheet instruments such as CDO's etc

* Stricter requirements for increasing CC limits only at customer request

* Proof of income and other borrowing on all loan apps

etc

This problem did not exist at all 20 years ago. You have to ask yourself why. The answer in most cases doesn't lie with the punters, it lies with the Banks, the Government and the regulators.

Edited by Red Kharma

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