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Millions of Americans Get Wages Garnished Over Credit Card Debt

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Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#51

Post by shmerl »

zo1 wrote: post #38
shmerl wrote: post #26

Earlier quoted context omitted.

Charging constant percentage on the debt is not called justice. It's a rip off.

They agreed to it when they signed up for the debt. I don't get it, just because someone (corporation/rich person) has lots of money, doesn't mean that not giving them back what they gave you is okay. Not giving them back money that you took is the rip off. Is it nice? Could they be a little more compassionate to peoples' situations? Sure, of course. That's why you have institutions that help people with debt-counsel…

"Agreed" because they had no choice. Profiting from other's debt is simply crooked, but became acceptable in society.

Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#52

Post by jaynos »

hnal943 wrote: post #44
smtddr wrote: post #29

Earlier quoted context omitted.

>>And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice. I wouldn't describe a big CC corp bringing a citizen to near-financial-ruin as "justice". While you are probably factually right and all the legal procedures more or less followed, this article still highlights a problem with our current system. That it drains people who are…

Of course the option is to not extend them credit at all so they avoid these Faustian deals. Of course, denying poor people access to credit is going to be politically unpopular.

Not to mention, bad for the bottom line.

Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#53

Post by morganvachon »

joshuaheard wrote: post #21

People don't wake up one day and find their wages garnished. They must have a lawsuit filed against them, be served with a summons, get a judgment against them, and finally have their wages garnished. And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice.

It does happen out of the blue like that sometimes, though. A little over a decade ago, my biological father who lived in another state had died suddenly. Because I had been covered under his social security plan when I was a minor and had battled cancer into adulthood (resulting in a $400,000 bill), the remaining debt of nearly $100,000 ended up in my lap. The only way I found out was when my wages began to be garnished. It turned out that a judgement was entered against me in his state, not in mine, and I never got any notice of a court date. Of course, I couldn't show up if I didn't know about it (I didn't even learn of his death until months after, he had been out of my life for many years) so a default judgement was entered. The other state's court system somehow didn't have my home address but knew where I worked and how to garnish my paycheck.

After speaking with a lawyer about it, I was told it would have ended up costing me tens of thousands of dollars and years of court battles with no guarantee of resolution. I ended up filing bankruptcy not long after due to the garnishment and other factors causing me to risk losing my house, and by some miracle the federal government allowed the judgement to be attached to the bankruptcy case.

Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#54

Post by shmerl »

fennecfoxen wrote: post #42
shmerl wrote: post #26

Earlier quoted context omitted.

Charging constant percentage on the debt is not called justice. It's a rip off.

Charging some percentage on the debt (interest) is in fact just compensation for the time value of money, risk, and reasonable expenses incurred while pursuing the judgement. Money isn't free for lenders, either -- until their borrowed money is returned, they're incurring recurring costs. It's only a rip-off when they're empowered to charge interest in excess of that.

In practice it's a rip off when people aren't able to pay off the debt, because lending entities simply constantly parasitically profit from that debt.

Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#55

Post by emir_ »

kolev wrote: post #13

Reading the responses here, I think you guys are completely disconnected from the reality, because you (like me) are lucky to have a high-paid high-in-demand profession! There are people in America who go to bed hungry - and not because they overspend or manage finances poorly. Just go over at http://www.feedingamerica.org/ as starters!

Good point. The guy in the article didn't just go on one vacation after another and then stopped paying when his balance reached $7,000. The article clearly said he lost his job, spent time living at a friend's place, and because he didn't have another job he had to somehow survive, which meant using credit cards.

Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#56

Post by emir_ »

hughes wrote: post #8

It's hard to see these "millions of americans" as victims in this matter. It's almost always possible to just _not buy_ something if you can't afford it.

If one is unemployed, can't find a job for x amount of time, do you think it is acceptable to use credit cards to survive during that period of time?

Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#57

Post by geebee »

zo1 wrote: post #38
shmerl wrote: post #26

Earlier quoted context omitted.

Charging constant percentage on the debt is not called justice. It's a rip off.

They agreed to it when they signed up for the debt. I don't get it, just because someone (corporation/rich person) has lots of money, doesn't mean that not giving them back what they gave you is okay. Not giving them back money that you took is the rip off. Is it nice? Could they be a little more compassionate to peoples' situations? Sure, of course. That's why you have institutions that help people with debt-counsel…

Fair enough - though to me, the question is just how much of my governments efforts, resources, and monopoly on physical force I'd like to devote to getting a creditor his or her money back.

We can say to a debtor, maybe you shouldn't have taken that loan, sure. But can we say to a creditor, well, why did you make a large and completely unsecured loan to someone with dodgy credit at very high interest rates?

Creditors need to be careful too. I do agree that this sort of thing is better handled with relatively lenient bankruptcy laws, and I do understand garnishment (through force of government) will have to be one of the functions of a court.

So this is more about my general attitude, since I doubt we'd disagree much on the specifics here. I just don't have great innate sympathy to people who get upset about defaults when their business is making high interest unsecured loans to people with poor credit. They're welcome to do this, I just wouldn't want to see my government bend over backwards to help them.

Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#58

Post by smtddr »

hnal943 wrote: post #44
smtddr wrote: post #29

Earlier quoted context omitted.

>>And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice. I wouldn't describe a big CC corp bringing a citizen to near-financial-ruin as "justice". While you are probably factually right and all the legal procedures more or less followed, this article still highlights a problem with our current system. That it drains people who are…

Of course the option is to not extend them credit at all so they avoid these Faustian deals. Of course, denying poor people access to credit is going to be politically unpopular.

And a financial disaster for CC companies because, let's face it, the whole credit system is significantly supported by exploitation of less fortunate people. If situations like this article describes didn't happen CC companies would be missing a lot of profit.

Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#59

Post by commandar »

fennecfoxen wrote: post #42
shmerl wrote: post #26

Earlier quoted context omitted.

Charging constant percentage on the debt is not called justice. It's a rip off.

Charging some percentage on the debt (interest) is in fact just compensation for the time value of money, risk, and reasonable expenses incurred while pursuing the judgement. Money isn't free for lenders, either -- until their borrowed money is returned, they're incurring recurring costs. It's only a rip-off when they're empowered to charge interest in excess of that.

>It's only a rip-off when they're empowered to charge interest in excess of that.

Which is what actually happens in reality.

Re: Millions of Americans Get Wages Garnished Over Credit Card Debt

#60

Post by bpodgursky »

Someone1234 wrote: post #48
joshuaheard wrote: post #21

People don't wake up one day and find their wages garnished. They must have a lawsuit filed against them, be served with a summons, get a judgment against them, and finally have their wages garnished. And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice.

> And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice. Not even close, take the example from the article, the debtor owed 110% of the original debt (7K Vs 15K) and that is with some payments in the interim. Is over 100% of the original debt "justice" or exploitation? With fees, fines, and other penalties rolling over (i.e. fines…

50% interest over how many years? I never ever hold a credit card balance but even I would not be able to turn down a capped loan over decades if I wasn't getting punished for it.
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