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Well Yea, But in this case the law (You know the courts) condone this act . So how can it be criminal?
It is not legally criminal because the law is primarily about protecting the government, not the population. The Drug War exists because government can expand its power and confiscate property, even though we know prohibition doesn't work. Tobacco kills over 435,000 people a year; the deaths from all illicit drugs combined is only 17,000/year. Yet tobacco is legal since lobbyist can buy their lawmakers' protection. The government doesn't care if people run out on their debts or rip each other off. It doesn't hurt the government. Those are matters they want you to hire a lawyer for (at $150 per hour or more), and sue in civil court, making the other guy hire a lawyer to defend themselves. That's what serves government best, since 95% of lawmakers are lawyers who head law firms.
Agreed. No tip for the waiter tonight. This shirking of one's responsibilities and rationalizing it has become endemic in the US. It is a very sad state of affairs. No wonder our "representatives" blow dough like drunken sailors when we have fellow citizens condoning and engaging in such behavior.
Simple tips-
1. If you don't have the money- don't buy
2. Pay off your credit card at the end of every month
3. A home and an annual vacation is not a right
4. A used car works like a new one, only it is cheaper
5. When buying a home, do not follow the realtor's "rule of thumb". Buy only a house that is at most double your annual income. My personal rules are that it should be equal to you annual income
6. Because clothes are out of fahsion doe not mean they are no longer any good
7. If you buy something stupid, sell something stupid
8. Put away 10% of your income each year
You guys are heartless. Its the credit card company's fault for making the limits so high and so easy to use.
New cars are too hard to say no too. Besides it is those darn sales people who trick the trusting into buying what they can not afford.
Houses? Well they should be free anyway.
Personal responsibility? But But But that would mean that its my fault when I screw up wouldn't it? We vcan't have people feeling bad about themselves. Its much easier to blame someone else. I know Blame Bush he made people buy houses they couldnt afford.
If repaying something like credit card debt would damage your ability to pay for higher needs for yourself or your family (healthcare, food, education, fuel/car repairs, home maintenance, or other such things), then the debt simply has to wait.
Financial companies play these sorts of games all the time - with customers, the political system, and with other financial firms. Look at any given large financial institution in the US, and you'll find a long history of business decisions and lobbying actions that would be charitably described as "self-serving," or uncharitably described as raw cheating or theft.
They know the rules of the game. They can make all the moralistic arguments they wish, but at the level of an individual family, it would be a mistake to put money into debt repayment over higher priorities.
Ugh 2 extremes. The world seems to be full of extremes. On one side we have dont worry screw people when you want, on the other side is a miserable caricature of the life of Scrooge.
If you can afford to keep up the payments, making a decision to default is indeed immoral. If it is *Truly* hopeless then default. Bankruptcy laws exist for this very reason.
From "just default if it feels good"
to this:
Simple tips-
>1. If you don't have the money- don't buy
We will start off agreeing. New toys, especially electronic ones, drop in price over time. Dont be an I-Tard and wait outside at midnight to be the first idiot to pay full price for an I phone. (or whatever)
>2. Pay off your credit card at the end of every month
In general true but life happens. We racked up quite a debt for relocating to get a much better job and having to sit on a house for almost a year. In the end we gave away the house but the damage was done. Our CC debt consists of frivolous things such as food and gasoline.
>3. A home and an annual vacation is not a right
True on the vacation. Havent had one of those since 2002. Total cost of it was $1000.
On housing, however I can say one thing for sure. For the vast majority of us, if you have a family and need 3 befrooms or more, renting absolutely sucks. You end up moving every 2-4 years. Apartments are tiny and cost more than the mortgage on a basic 3 BR house each month. Houses you can rent are often awful. Ladlord issues. Etc etc etc. I REALLY understand the desire to buy.
My current "home" is a 1100 SF crapshack original rent was $1750 a month. Welcome to the Northeast. The rent went down when the wonderful landlord decided to stop paying the mortgage, go into foreclosure, and start pocketing my rent. He wanted me to stay another year while I looked at replacing my primary job (layoff) and could move out being month to month. Yes I made a deal with the devil.
>4. A used car works like a new one, only it is cheaper.
Be careful of this. Autos are one of the most difficult things to buy effectively. Most people suck at it, hardcore. Many people pay way too much and/or end up with clunkers. And no, used are not always cheaper. If you do the trade in thing every 2-3 years, you are indeed on a treadmill. If you buy new and keep it 10 years and 160K miles, things even out if the car has a 100K warranty. AKA buy it new and drive it till ya kill it.
>5. When buying a home, do not follow the realtor's "rule of thumb". Buy only a house that is at most double your annual income. My personal rules are that it should be equal to you annual income.
OK we agree on dont follow the realtors rule of thumb at 35% of GI/mo then add the extras. A good Rule of thumb for a reasonable chance at being a homeowner. 10% down and 28% of GI = PITI+ PMI. AKA the old rules for buying a house before the year 2000.
The suggestion.... (1x income?) Riiiigggt.
Let me shorten this one for you then.
Never buy a house unless you make 6 bills and live in Indianapolis.
>6. Because clothes are out of fahsion doe not mean they are no longer any good.
95% of people can deal with this one VERY easy AND buy nice clothing. Simply buy opposite season. I just paid $14 for a $150 winter coat by Polo at Sears during "friends and family night". Shorts are almost free in September. Levis are about the only thing I have never seen a killer price on.
>7. If you buy something stupid, sell something stupid
Huh??
>8. Put away 10% of your income each year
Good luck on that one if you have kids. Maybe we should redo #8 to "dont have kids"
Im a black belt bargain finder and life is still hard.
Ill give you all an easy $50 a month tho. If your cell phone use consists of short calls and little total time. DONT go with a monthly usage plan. Go prepaid. My T Mobile phone costs me about $90 a YEAR. You can get the phone then go to Ebay and get the $100 card with 1000 minutes on it for ~$90. The minutes last a year if you buy the $100 card. My coverage is quite good and the phone was a nicer one for a huge $40 internet price. The phone itself came with like 200 minutes. *
*(I dont work for, have any interest in, or have stock in T Mobile. They are not paying me to say this.)
Last edited by ottomobeale; 03-08-2010 at 09:54 PM..
If you are in dire financial straits and feel that the only way to get back on you feet is to default on your credit card debt, let me offer you the following words of encouragement. But first I want to affirm what many on this forum and what the credit card companies themselves will tell you. By defaulting, you are in breach of contract. There are no two ways around it and the only way to deny it is through self-delusion.
Now, having said that, I still contend that if default is the only way to improve your financial situation, go forth and default. Many people feel that defaulting on a credit card debt, or any contractual debt for that matter is a moral matter and therefore renders the default as an immoral act and the one who defaults as an immoral person. I believe this is a misconception which has served the creditors quite well. But if one removes default from the realm of morality and instead understands it as a purely pragmatic decision, the implications will not seem so dire and the consequences not nearly as severe. In addition to the misconception that defaulting is a moral matter, many feel that to default is the equivalent to theft, and most people do not relish the idea that they are thieves and rightfully so. But default is not theft because theft implies intention and how many people incur a debt with the sole intention of defaulting on that debt? Indeed this could be the case in some isolated instances, but it is an extremely rare thing I'm certain. And even in the rare cases where someone would deliberately go into debt with the intention of defaulting, it would be difficult to prove those intentions; and it would appear that this fact is recognized by the legal system since defaulting on a debt is not punished criminally.
Having established that defaulting on a debt is neither a moral matter, nor the criminal offense of theft as even the legal system clearly recognizes, the issue moves into the arena of pragmatics. Now, the issue of making difficult financial decisions which have unhappy results is not a new thing to the business world. They make decisions like this every day. Corporations make these types decisions with the motive of profit and company solvency as primary. When a corporation lays an employee off or reduces his or her salary or benefits, it does so for the sake of profit and most people recognize this as legitimate and acceptable because that is what a corporation is in business for to begin with. Well that same logic applies to individuals, only with an individual, the primary goal is not profit as that is a concept that applies to business. For an individual, the motivation for financial decisions are more along the lines of ensuring that the necessities for survival are provided for both the individual and his or her dependent family and perhaps after that, securing some savings for contingencies and for the future. Therefore the decision by an individual to default on a debt is on an equal footing with a corporation's decision to terminate a employee due to failing profit or company insolvency reasons. Both decisions are the result of changing circumstances and are pragmatic in nature and do not belong in the sphere of morality. A corporation terminating an employee due to a downturn in the economy and a decrease in profits is a decision based on a change in circumstances. When the employee was hired, the economy was better and profits were high, thus the costs attributed to the services provided by the employee were justified. Now, with the negative changes in the economy and the consequent effects on profits, it is no longer considered a justifiable cost to keep the employee on the payroll. Few will argue that the corporation was not justified in terminating the employee for these reason despite the subsequent financial hardships which will ensue.
Similarly, when negative economic changes result in an individual deciding that debt default will stabilize his or her financial situation, his or her decision to do so is based on the same pragmatic justification that corporations employ when making their decisions to terminate employees or reduce salary and benefits. The circumstances have changed and default may be an attractive option for the struggling individual. But for some reason, when an individual makes this decision, he or she is maligned, not just by his or her creditor, which is understandable; but also by much of the general public as well. The logic here escapes me. Perhaps it is because many people falsely think that defaulting on a debt is a moral decision. If this is the case, why do they not consider the actions of the corporation immoral? Anyway, hopefully my argument above will change that thinking and people will understand that decisions of economics must be removed from the moral arena and placed in the pragmatic arena instead. Also, the acceptance of the fact that defaulting on debt is not considered as theft and is never punished as such may also reduce the duplicitous opinions on this subject.
Now there is one valid argument that can be used against the debt defaulter which cannot be used against the corporation on this matter. It is something we touched on at the beginning of our discussion. Defaulting on a debt is a breach of contract, whereas a corporation terminating an employee due strictly to reasons of economics is not. Corporations do not sign a binding contract with you to keep you employed regardless of economic considerations, but when one applies for and receives a loan, such a contract is indeed required. Perhaps this is the justification for the vitriol against debt defaulters; they may not be immoral, they may not even be thieves, but by God they are contract breakers!
Well, perhaps we can put this idea of breach of contract into perspective. Indeed a contract is a good thing in that it ensures against foul play against the creditor for transient, superficial and surreptitious reasons. No doubt if there were no contracts, the incidence of default would be a hundred fold worse. But to hold someone to a contractual obligation when the keeping of that contract will do serious harm to the person under the contractual obligation is unreasonable and cruel especially when the harm done to the person who violates the contract is worst than the harm done to the contract holder. In most cases, breach of contract will result in a lowering of profits for the creditor but not in the complete destruction of the corporation or lending institution. Indeed, even with the high incidence of default, one still sees million dollar television, radio and print media advertising campaigns going on for all the major credit card companies. It hardly seems as if the levels of default has effected their advertising budget for one thing. Indeed these corporations will continue to pay their overhead and their creditors and the loss due to defaulting debtors will come out of their profits. But what are the consequences if the contract is not breached and the debtor pays the creditor in full despite his or her diminished economic situation? It could mean going without necessities to life. It could mean skipping meals or not being able to purchase medication. It could mean eviction or home foreclosure and a whole host of much more serious circumstances than the simple cut in profits that would be the creditors burden to bear if the route of default and breach of contract was taken by the debtor.
Now, having demonstrated that in most cases the harm done to the debtor in not breaching contract is more severe than the harm done to the creditor if the debtor defaults; from a strictly pragmatic and utilitarian sense, the option that would do the least harm would be to default on the debt. This is a case where due to circumstances changing for the worst, no matter which decision is made, one party will be harmed. But clearly in a situation where only one party wins as it were, it is better to ensure that the losing party is the one who is most able to absorb the loss. Clearly in the majority of the cases, this would be the creditor.
Hopefully this will empower those who through no fault of their own, feel that defaulting is the only option for them. Remember the following things when you default:
1. Remember that by defaulting, the harm done to the creditor is negligible compared to the harm incurred by the individual if he or she does not default.
2. Remember that defaulting is not a moral decision and does not involve morality. Defaulting on a debt is an economic decision driven solely by pragmatic and economic considerations, just like the decisions corporations make when they decide to terminate employees or reduce salaries and benefits for financial reasons.
3. Defaulting on a debt is not theft because theft implies intention and most people do not intend to default at the outset and even if they did, it would be very difficult to prove. The legal system realizes that and that is why you debt defaulters are not
criminally prosecuted.
So if defaulting is the only option, take the above facts as comfort and know that you are just making a good business decision like corporations do all the time. Is it fair? No, but we all know life isn't fair and the best we can ever do is what is best for ourselves and our families who depend on us. Life owes none of us anything, corporations and individuals alike. If it comes down to it, we must take what we need to survive.
One final observation regarding contracts: Has it ever occurred to you that contracts do more to protect corporate profits than they do to protect general welfare. Since as I demonstrated above, profits are primarily what suffer when debts are defaulted on and contracts are breached, the contract whether by design or not protects what needs protection the least. Contracts protect profit, which is abundance at the expense of necessities, which often are not met due lack and deficiency. Some food for thought.
Listen, no one held a freaking gun to your head and made you sign on for that second equity home loan or that 5th credit card. And in the vast majority of the time during the "roaring economy", people who did that didn't do it to put food on the table; they did it to buy a new car they didn't need, get an even bigger house, buy an even bigger flat screen TV, etc..
Maybe they didn't intend to default on their debt, but guess what? THEY WERE IRRESPONSIBLE. They knew that they didn't have the money, and they knew that they were agreeing to pay it back. They lived beyond their means and made idiotic choices. And guess what else? Where I come from, once you leave grade school and grow up to be a big boy or girl, you're supposed to be responsible and take care of your obligations and look out for yourself.
Meanwhile as these people were living it up a few years ago, I was driving a used car, living in a nice but affordable place, managing school debt, saving money for a rainy day, and making sure that I did not live extravagantly beyond my means. I could have enjoyed a nicer car, I would have liked a bigger house, I would enjoy that extra vacation, but guess what - I DIDN'T... because I'm an adult, and I know that my financial solvency is entirely up to me. And I believe that I can't/shouldn't depend on anyone else except for myself. And now I'm basically the one indirectly paying for the idiot actions of all of the people who spent way more money than they could repay.
So CRY ME A FREAKING RIVER about how the big banks are sooo mean and it's all so horrible, blah blah. I'm not buying that ****.
So yeah, go ahead and defend people who default on their obligations if you must, but everyone will ultimately rightly recognize these people for what they truly are: immature people who are not grown-up enough to be trusted to handle their own finances.
Um, it's a little weird people defending the credit card companies. I'm not an evil person, I don't spend lavishly..if I did, I'd be wearing clothes that weren't from Target or The Gap. I have a $2K spending limit on my card & I believe a year & a half ago, my rate was 14%. Horrid, yes, because I have bad credit. However, I've had this card for a few years. Last year, they upped it to 23%. I of course called them & got the whole ball & wax. Then, it was upped to 29%. Now, I was late twice in the past year...I know, to you perfect people out there, that's a travesty. When I say late, I mean I my payment was a day late, no joke. Yes, I know, that's still late. However, to jack up my rate to 29%??? I'm sorry people, that's ludicrous. I don't care if you have perfect credit or not. I've talked to many many people about this, most of them who have very good credit, and they all are outraged about it. This is not right, I don't give a pooh how perfect you are, that's not right.
Seems like a lot of people are drinking the bank kool aid. It's a form of indentured servitude, you'd be a fool not to walk away. The people that attach "morals" to a BANK are out of their minds.
Show me what morals Goldmann Sachs had when dealing with Venezuela during the 90s, or currently in Iceland, and now every nation on the planet.
Seems like a lot of people are drinking the bank kool aid. It's a form of indentured servitude, you'd be a fool not to walk away. The people that attach "morals" to a BANK are out of their minds.
Show me what morals Goldmann Sachs had when dealing with Venezuela during the 90s, or currently in Iceland, and now every nation on the planet.
I don't have a problem w/interest rates, it comes w/the territory. But when companies jack it up so high that even when you make way over the minimum payment that it's still going towards interest? That's highway robbery in my mind. And my parents, who have absolute perfect credit feel the same way. I just can't believe these companies have gotten away w/it for so long & they're STILL getting away w/it. It's total fricking BS.
Wow, I can't believe the first posts in this thread. Let me say at the outset that I've never had an issue with paying for my card. Still, it's incredible how many people are willing to throw fellow Americans under the bus because of their ignorance, and for what? In order to preserve an incredibly exploitative industry and perpetuate its shady practices?
Personally I think high schools should teach students about fiscal responsibility, but that's another issue. Credit Card companies in particular go out of their way to deceive people. Big businesses have proven time and time again their willingness and adeptness with regard to prying profits out of the coffers of customers, and our governmental oversight agencies are sadly ineffectual and in need of major reform.
What's best is that nobody detracting from the post has substantively engaged his point, which regards morality. Should someone worry about making a payment if it means their children will go hungry?
Where money is concerned moral arguments are for suckers, and nobody knows better than the credit card executives that there's one born every minute.
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