The People's Bailout
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The People's Bailout
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Re: The People's Bailout
#2How does buying debt from creditors work? Would something like this actually cause buying debt more expensive and thus benefit creditors instead?
Re: The People's Bailout
#3How does buying debt from creditors work? Would something like this actually cause buying debt more expensive and thus benefit creditors instead?
Not really, because it could just set a metric on how cheap debt is before it purchases (i.e the 30:1 return they mentioned).
In the end creditors want to get rid of risk, so if someone isn't paying the loan, getting 1/30th of that money is better than 0.
I don't see how this could create a competitive (and thus drive prices up) situation.
Re: The People's Bailout
#4someone should write a guide on how to buy up your own debt for 1/30th of the cost
Re: The People's Bailout
#5So, what would prevent me from going into a massive amount of debt, not repaying it, and asking everyone else to foot my bill?
This seems like OWS is saying, "Well, corporations got greedy and were bailed out. Now it's the people's time to do the same thing." Why is something, when supported by a corporation, immoral when the same thing, supported by "the people", is righteous?
This seems like it's just encouraging bad behavior all around. Debtors get some money, people in debt get a massive discount, and people who play by the rules are even more at a disadvantage.
We need to restore trust in the system by educating people and holding corporations accountable for fraud - not by undermining the loan system. This move by OWS sickens me.
Re: The People's Bailout
#6This is a pretty interesting idea, economically speaking. Does anyone know what is necessary in order to become a debt broker? Being able to buy your own debt (by proxy) for pennies on the dollar might have pretty broad implications.
Re: The People's Bailout
#7So, what would prevent me from going into a massive amount of debt, not repaying it, and asking everyone else to foot my bill? This seems like OWS is saying, "Well, corporations got greedy and were bailed out. Now it's the people's time to do the same thing." Why is something, when supported by a corporation, immoral when the same thing, supported by "the people", is righteous? This seems like it's just encouraging b…
You make it sound as if people who play by the rules can't have distressed debt. Is that what you mean?
Re: The People's Bailout
#8How does buying debt from creditors work? Would something like this actually cause buying debt more expensive and thus benefit creditors instead?
Not really, because it could just set a metric on how cheap debt is before it purchases (i.e the 30:1 return they mentioned). In the end creditors want to get rid of risk, so if someone isn't paying the loan, getting 1/30th of that money is better than 0. I don't see how this could create a competitive (and thus drive prices up) situation.
If I understand things correctly, it may drive borrowing costs down by lowering the lender's risk exposure.
(If you loan money to someone, and they don't pay you back, with this program there's a tiny chance that OWS will, lowering your risk. Curious to see OWS bailing out bankers as well as debtors.)
Re: The People's Bailout
#9So, what would prevent me from going into a massive amount of debt, not repaying it, and asking everyone else to foot my bill? This seems like OWS is saying, "Well, corporations got greedy and were bailed out. Now it's the people's time to do the same thing." Why is something, when supported by a corporation, immoral when the same thing, supported by "the people", is righteous? This seems like it's just encouraging b…
It's called bankruptcy. 7 years of never being able to have credit.
Re: The People's Bailout
#10The problem that I see with this is that once your debt is sent to collections, that mark is already on your credit report for 7 years, even if you pay off the debt.
So, "forgiving" the debt is pretty meaningless. People still have their credit report tarnished, which leads to higher interest rates, higher car insurance, and is basically another way to oppress people who are already poor. The only advantage to the debtors in this case is that they won't get phone calls from collection agencies. It's a nice idea though.