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

Paying consumer debts is basically optional in the United States

pluralistic.net

Post reply on HN
Print view View original

81–90 of 116 posts

Re: Paying consumer debts is basically optional in the United States

#81

Post by extraduder_ire »

bogwog wrote: post #74
jwie wrote: post #55

When creditors sell debt to collections they should be required to allow the debtor to buy their debt back at that price. Of course they'll never actually do that. Usurers are unreceptive to any notion that you won't pay every last extortionate penny. They'd rather sell it to collections for 5 cents on the dollar than let you settle for 50 in a straightforward conversation.

I think that'd be hard in practice since the article mentioned that they're sold in bulk. Sending offers to everyone in a package would be difficult. But I wonder if it could be possible to crowd fund something like this, or have a non-profit that just buys cheap debts like this and forgives them all? Idk what that would cost, but it could help shrink the shady debt collector industry a little.

Forgiven debt counts as income. There's some messing you can do with it, like I think one of the latenite hosts did with some student debt.

The whole sold-in-bulk thing I could see being 'remedied' by having some sort of federal clearinghouse that each item of debt has to pass through. Though, that'd probably get fought tooth and nail so money-men can pull subprime-shenanigans.

Re: Paying consumer debts is basically optional in the United States

#82

Post by h2odragon »

rsynnott wrote: post #43

From the linked piece: > Well, not all of it. I didn’t inherit the assets. She didn’t leave a will, which meant the state of Tennessee inherited her house. What I inherited was her debt. Wait, is this right?! In Ireland, and I thought most common-law places, if someone dies intestate, an administrator is appointed, in practice generally the next of kin. Any assets go in the estate, the administrator pays any debts ou…

Cory read (and linked) this: https://www.bitsaboutmoney.com/archive/the-waste-stream-of-c...

but missed this bit:

> A second scrub will typically remove dead debtors, because they infrequently answer their phones. (Debts are not inherited in the United States, a fact which the debt collection industry frequently demonstrates strategic ignorance of.)

Re: Paying consumer debts is basically optional in the United States

#83

Post by NovemberWhiskey »

crazygringo wrote: post #69

This headline/article is silly. Yes, it's optional in the sense that you won't go to prison . But if you want any chance of being able to take out a mortgage on a house, or to finance a car purchase, then it's not very optional. Not to mention a bad credit score makes it much harder to even rent many apartments. Also, lenders will sue you if you have the money. In which case it's no longer optional either, when they…

>If you don't pay, it generally has real negative consequences.

If you owe a lot of money on your credit cards, the lender will actually sue you - rather than selling the debt - and then put a lien on your property. I once bought a house in an estate sale which was also a short sale (I do not advise this) and both American Express and another bank had done this to the prior owner who owed $20-30K.

Re: Paying consumer debts is basically optional in the United States

#84

Post by NovemberWhiskey »

p1esk wrote: post #79
yieldcrv wrote: post #76

Earlier quoted context omitted.

It improves but collections are an adverse notice on your credit report that stay for 7 years. Its different from just holding a high balance on the card. The score almost means nothing with them present.

So if I want to finance a new car, does it make a difference whether the debts are paid or not?

Yes - unpaid charge-offs are more derogatory than paid ones - I'm not sure that hits (say) a FICO score but lenders that look at a full report can tell the difference.

Re: Paying consumer debts is basically optional in the United States

#85

Post by flangola7 »

cj wrote: post #67
l33t7332273 wrote: post #4

Earlier quoted context omitted.

> Another called me work repeatedly and told my boss Even from a purely self serving perspective, why would they do this? If your boss gets mad that you have bad debt and fires you, then it’s now even less likely that you will be paying off the debt, no?

This may be hard for HN readers to believe given the anti-employer sentiment in many threads here, but... My friend owns 15+ apartment buildings in "not so desirable" neighborhoods. He deals with a lot of tenants who don't pay rent and eventually he has to evict them. 3 months ago he was evicting someone for not paying rent for 12+ months, and a week before the police were going to help get the tenant out of the apar…

Landlords that own entire apartment buildings are parasites, so there's not going to be very much sympathy. Most parasite species are mitigated much more directly once detected by a human host.

Re: Paying consumer debts is basically optional in the United States

#86

Post by NovemberWhiskey »

egypturnash wrote: post #38
Turing_Machine wrote: post #12

Link to Patrick McKenzie (the actual source, rather than Cory Doctorow's blogspam): https://www.bitsaboutmoney.com/archive/the-waste-stream-of-c...

Is it still blogspam if this paragraph exists in the end of the post? McKenzie doesn't know what will fix this. But Michael Hudson, a renowned scholar of the debt practices of antiquity, has some ideas. Hudson has written eloquently and persuasively about the longstanding practice of jubilee, in which all debts were periodically wiped clean (say, whenever a new king took the throne, or once per generation): https://p…

>Is it still blogspam if this paragraph exists in the end of the post?

I have no particular opinion on that question but, having read the original patio11 post, virtually 90% of this one is just paraphrasing of its contents.

Re: Paying consumer debts is basically optional in the United States

#87

Post by xtracto »

pier25 wrote: post #17

Isn't there like a credit score system in the US that companies can check? In Mexico there's something called the Credit Office (buró de crédito) that banks can check if you've paid all your debts.

Aaah but in Mexico exactly the same thing happens: you can basically ignore Buro/Circulo de Credito and after 6 years by law they have to drop any unpaid debt report.

I worked in a Mexican credit startup 10 years ago and one of the main issues we dealt with was just that: there is no legal mechanism for a lender to recover the money they borrow. Not paying a loan is not illegal. And people in Mexico have 0 financial education .

So you have to include your default rates as part of your lending model. 30% default first loan. 15%-20% default mixed 2nd+ loan .

That in addition to a base bond rate of 10% (you can lend your money to the Mexican government for an extremely secure 10% interest) is what makes credit in Mexico Soooo expensive.

I have a friend who is lawyer and used to work in the enforcement area if Scotiabank mortgages . The stories he tells about people that just decided not to pay their mortgages but had 4 or 5 Harley Davidsons in their houses when they went to evict them... among other crazier stories.

Re: Paying consumer debts is basically optional in the United States

#88

Post by vel0city »

yieldcrv wrote: post #76
p1esk wrote: post #70

Earlier quoted context omitted.

I thought once you paid the debt the credit score should improve, no?

It improves but collections are an adverse notice on your credit report that stay for 7 years. Its different from just holding a high balance on the card. The score almost means nothing with them present.

I once had a collections report on my credit history. I paid off the debt and asked them to remove it, a few days later it was gone as far as I could tell.

Not that everyone's experiences will be like this, just pointing out it is not necessarily always 7 years on the report.

Re: Paying consumer debts is basically optional in the United States

#89

Post by vel0city »

I've had things go to collections twice in my life, both times were some bill I forgot about and moved away and the first time I heard about being delinquent was the collections call. One time I asked for the evidence and they actually did mail me all the documentation and proof of the debt. The other time I asked for documentation and ended up never hearing from them again. I still don't really know what that debt was, it never appeared on my credit history or anything else.

Re: Paying consumer debts is basically optional in the United States

#90

Post by [deleted] »

flangola7 wrote: post #85
cj wrote: post #67

Earlier quoted context omitted.

This may be hard for HN readers to believe given the anti-employer sentiment in many threads here, but... My friend owns 15+ apartment buildings in "not so desirable" neighborhoods. He deals with a lot of tenants who don't pay rent and eventually he has to evict them. 3 months ago he was evicting someone for not paying rent for 12+ months, and a week before the police were going to help get the tenant out of the apar…

Landlords that own entire apartment buildings are parasites, so there's not going to be very much sympathy. Most parasite species are mitigated much more directly once detected by a human host.

[deleted]
Post reply on HN