Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The People's Bailout

howtosharpenpencils.tumblr.com

Post reply on HN
Print view View original

21–30 of 323 posts

Re: The People's Bailout

#21

Post by [deleted] »

MattGrommes wrote: post #15
heyrhett wrote: post #10

The 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 de…

This is "a" problem, not "the" problem. For a large number of people, getting $5k or $10k of debt erased would at the very least a large weight off their back, at the most a life changer. Living paycheck to paycheck means cherishing every extra dollar you get to keep. Getting to keep $50 or $100 a month in your pocket instead of sending off to some credit card or debt collection agency is a big deal sometimes. Most p…

[deleted]

Re: The People's Bailout

#22

Post by malandrew »

rosser wrote: post #16
perfectm wrote: post #9

Earlier quoted context omitted.

It's called bankruptcy. 7 years of never being able to have credit.

Are you kidding? They hand out credit cards like candy to the recently bankrupt.

TBH that's the problem of the companies handing out the credit cards. Companies that do that are making a business decision. You and I need not worry about their business model because they have their own spreadsheets with assumptions of how many people will not pay.

Re: The People's Bailout

#23

Post by rdtsc »

MattGrommes wrote: post #15
heyrhett wrote: post #10

The 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 de…

This is "a" problem, not "the" problem. For a large number of people, getting $5k or $10k of debt erased would at the very least a large weight off their back, at the most a life changer. Living paycheck to paycheck means cherishing every extra dollar you get to keep. Getting to keep $50 or $100 a month in your pocket instead of sending off to some credit card or debt collection agency is a big deal sometimes. Most p…

But I guess this is only for government and legally mandated wage garnishment. Otherwise if they already have the black mark on their credit, will paying back anything matter or change that? Is that true?

Re: The People's Bailout

#24

Post by gmkoliver »

marknutter wrote: post #19

How does OWS think this debt accumulated? Debt isn't some random accident like getting hit by a car while crossing the street. You have to get yourself into debt. It used to be taboo, but it's acceptable to get into debt these days and worse yet, walk away from it. OWS, to me, represents an entitled generation.

Debt isn't some random accident like getting hit by a car while crossing the street.

No, but distressed debt can be.

Re: The People's Bailout

#25

Post by patio11 »

For the benefit of folks who might not understand how debt collection works, which may include OWS: if you buy $10,000 of an individual's debt for $500 and then forgive the debt, they have just incurred income of $10,000 and are obligated to pay taxes on it exactly as if you had handed them $10,000 in cash for services rendered. If you don't inform the IRS that you forgave the debt, via a 1099-C, you're going to get wrist-slapped mightily if they think it is an honest mistake or, if you're, say, doing it as a political statement, you will be afforded the opportunity to make your political statement in front of a judge hearing your case for criminal tax evasion.

This is not accounting advice, by the way. There's some wrinkles if the debt was caused by your principal residence, due to some of the recovery measures passed two years ago. If its, say, CC or medical debt, though...

Re: The People's Bailout

#27

Post by washedup »

Won't a result of this be an increase in the "cost" of debt, and hence interest rates on variable loans would raise for everyone else while other's are being paid off? Seems bad..

Re: The People's Bailout

#28

Post by narcissus »

marknutter wrote: post #19

How does OWS think this debt accumulated? Debt isn't some random accident like getting hit by a car while crossing the street. You have to get yourself into debt. It used to be taboo, but it's acceptable to get into debt these days and worse yet, walk away from it. OWS, to me, represents an entitled generation.

"Debt isn't some random accident like getting hit by a car while crossing the street."

Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills.

I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt".

Re: The People's Bailout

#29

Post by unomateo »

marknutter wrote: post #19

How does OWS think this debt accumulated? Debt isn't some random accident like getting hit by a car while crossing the street. You have to get yourself into debt. It used to be taboo, but it's acceptable to get into debt these days and worse yet, walk away from it. OWS, to me, represents an entitled generation.

I was thinking the same thing... To make this a better program they should buy someones debt, in the example they bought a $14,000 debt for $500. The person that had the debt removed should pay $1,000 back to OWS. Then OWS can buy 2 more... and so on. Unfortunately, the person that had the debt removed will probably just create more debt for themselves

Re: The People's Bailout

#30

Post by heyrhett »

malandrew wrote: post #17
HeyLaughingBoy wrote: post #12

Earlier quoted context omitted.

Seven years goes by in the blink of an eye once you're old enough ;-) Forgiving the debt is not meaningless: it's a big chunk of money you don't have to pay off. Granted, it's better to work with the creditor and get them to settle for a smaller amount, but a $15k debt removed from your record is not likely to cause you $15k of increased expenses over 7 years.

I'm actually interested in knowing if I bought the debt of someone else, could I write whatever I wanted on their credit report? For example, could I purchase $15k worth of debt for $500 and then forgive the debt and report to the credit agency that it was paid in full?

You can't erase the statement that the debt was 180+ days late and sent to collections.

The original debt holder could erase that statement, but they have absolutely no incentive to, since they took a 97% loss on your debt.

A single late payment like that will probably drop your FICO score 150-200 points.

Post reply on HN