Thursday, November 6, 2008

Are you kidding me??

I missed this a last week-

http://www.foxbusiness.com/story/markets/economy/groups-seek-credit-card-debt-forgiveness/

So you can overspend to your heart's content- live well over your means and then simply not pay 60% of the bill?

This has got to be stopped.

The companies who overextended credit to people should eat it- and the people who took out the credit should file bankruptcy and call it a day.

When will this lack of responsibility ever end?

2 comments:

Jim said...

I think the CC companies actually want this because they'd rather have someone pay them back 60% of the debt instead of having the person just declare bankruptcy and cancel all their debt.

I don't know why the government is involved in this, however. If the borrower and the lender want to renegotiate, and they both agree, good for them. I suspect they want the government to come in and break contracts (like they want to do with executive pay and mortgages).

... more reading...

Ah, they don't want the government to break contracts in this case; they want to be allowed to postpone tax payments for five years. Plus the lenders will be able to delay writing down the loss for five years. In other words, cook the books and spread out their losses so people don't immediately realize how much money they've lost.

This explains it:
http://www.latimes.com/business/la-fi-lazarus5-2008nov05,0,6448941.column

But you're right. It is lame that some will get debt forgiveness without the "punishment" of bankruptcy. Rewarding irresponsible behavior, or just delaying the pain of someone who will go bankrupt anyway. As usual, the cost is spread to the responsible people who pay their CC bills on time.

Goose said...

This is ridiculous. Bankruptcy "protection" was established so that people would not have to fear their creditors, no matter how many phone and lawyer calls you get. Too bad the CC companies and mortgage companies placed bad bets. If they want to renogitiate terms, go right ahead, it is their business. But don't ask the government or tax payers to prop up both wrongs.

I also don't believe this bs about the bailout saving the banks/etc and getting the credit flowing. I saw an article in the Strib the other day where they asked a bunch of banks and small businesses if they had problems issuing or getting loans. All of them said "No". And the financial analysts all said this was a good story, but the facts don't back it up. Shame on the legislators who tried to fear the people into believing this sham. God bless Bachmann for standing pat.