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Nothing, seems to me like these folks have it figured out. They appear to have no money, so creditors won't come after them.
There is also a statue of limitations on debt collection (suing to collect). Some states like NH it is as short as 3 years, most places it is 5. If the credit card company doesn't sue you to collect, once it hits the SOL then they can only sue and hope you don't contest/show up and they get a default judgment on you.
NH resident goes 36 months, one day since his/her last payment and wins the Powerball the CC companies cannot recover a dime. He/she still owes the money but they can't sue to collect anymore unless they get the person to reset the statue of limitations on the debt (make a partial payment or somehow acknowledge the debt) then the SOL restarts for another 3 years.
Seems RI and WV are 10 year states but the rest seem to settle in at the 4-5 year mark on most types of debt. Also remember at 7 years the bad debt falls off your credit report so this isn't a permanent thing (like a judgment could be).
its crazy that this is what it has to come to for people to figure out they cant borrow any more money. Also they still survive when they stop using them. SMH.
While debt can come from many unexpected causes (eg; unforseen medical expenses, loss of a job, other emergencies) ... it most often comes from spending beyond one's means (just like the government). How many times have we (or our kids) seen someone who doesn't earn/have any more money than we do and wondered, "How in the world can they afford that ... bigger house, newer car, vacation, expensive college, etc)?" Invariably, the answer is, 'They can't! -- They are simply running-up loans and credit card debts for things that they can't afford ... and are unlikely to ever be able to pay for!'
So, who is responsible? Are the 'bad old banks and credit card companies' who extend credit to people who make poor decisions, responsible? ---(If so, then aren't the stock market, casinos, new car dealers, retail stores, housing contractors ... etc. --- equally culpable?). I agree that banks and credit card co's. take a calculated risk, for which they are well paid; but, the rationalization that this absolves the individual of personal responsibility is exactly that ("rational-lies").
If Europe or the 'credit-lives' of individual Americans is any indicator, the U.S. and many of its citizens may be rapidly approaching a debt ceiling --- from which no non-catastrophic solution exists! Yet, how often do our politicians actually do something to cut spending or costs? ... much less, where is the public mandate to 'cut spending --- at all costs' (versus, 'cut away, as long as it doesn't affect me!). --- Where is the great movement across the land to pay-off debts, reduce consumption and live within our means?
I believe that most of our personal financial 'wounds' ---and those being sustained by our country, are self-inflicted. These 'wounds' may be fatal -- and they will certainly not be healed until individuals start taking responsibility for their own lives and actions. (Look around! --- Not everyone (even the working poor) is facing a personal debt crisis. Likewise, ask anyone facing bankruptcy --- if the fact that many others are in the same boat... is any consolation. The government cannot and will not save us! --- We must each protect ourselves (often, unfortunately, against our own government/politicians). We do that by assuming personal responsibility for our own lives and finances.
I can understand what you're saying and I think your approach is a noble one. Unfortunately, it's also terribly naive. As harry chickpea touched on, the government is controlled by the banking, insurance, and other industries. Congress creates laws that benefit them, not the people. These same banks are bailed out with our tax dollars when they overextend themselves. Why should individual Americans feel obligated to repay them? When the banks get caught stealing billions, they pay a fine of millions, and just try to be sneakier next time. You need to understand that we're all living under a system that is rigged and designed to prey upon us.
I once thought like you many years ago, when I was young and idealistic. "Be a good American, work hard, pay your bills on time, live within your means", etc. Well in return, your government gives you bailouts, lower wages, inflation, NAFTA, higher taxes, third world immigration, unaffordable insurance, etc, etc.
All of these things are enriching these same banks/industries at our expense. And you expect me to feel guilty over not paying them back? I say, stick it to the banks at every opportunity. Take as much as you can from them and return as little as possible. Use all means legal and illegal.
I can understand what you're saying and I think your approach is a noble one. Unfortunately, it's also terribly naive. As harry chickpea touched on, the government is controlled by the banking, insurance, and other industries. Congress creates laws that benefit them, not the people. These same banks are bailed out with our tax dollars when they overextend themselves. Why should individual Americans feel obligated to repay them? When the banks get caught stealing billions, they pay a fine of millions, and just try to be sneakier next time. You need to understand that we're all living under a system that is rigged and designed to prey upon us.
I once thought like you many years ago, when I was young and idealistic. "Be a good American, work hard, pay your bills on time, live within your means", etc. Well in return, your government gives you bailouts, lower wages, inflation, NAFTA, higher taxes, third world immigration, unaffordable insurance, etc, etc.
All of these things are enriching these same banks/industries at our expense. And you expect me to feel guilty over not paying them back? I say, stick it to the banks at every opportunity. Take as much as you can from them and return as little as possible. Use all means legal and illegal.
Except for your last sentence, we are saying the same thing. My point was not that we should feel guilty about an idealistic notion of responsibility for 'paying back' those leading the 'corruption parade.' It is that people need to be aware of what is being sponsored by their 'trough-dependent' politicians ... and vote them out, rather than continuing to re-elect them. Sadly, this is not going to happen, because the politicians know that they can keep going 'back to the trough' if they only 'bring home the bacon' to their immediate constituents.
Your last sentence advocates an "if you can't beat them, joint them" philosophy that is based on the same dishonesty and double-dealing being used against them. While many take this approach in their personal lives and to government hand-outs, it destroys personal initiative, integrity and responsibility --- and will ultimately destroy this country.
I have some RETIRED relatives who have tens of thousands in credit card debt and now have reached the point that they just can't pay anymore. The minimum payment is too much and if they pay just a partial payment they will get huge penalties and interest rate increases. So they just decided to stop paying entirely.
Basically they are living on a small pension and social security. They own their home but the house is in real rough shape and has little value. They have under $1000 in the bank and a old car.
Since they stopped paying of course the phone started ringing off the hook so they canceled their phone service and now use a Cell Phone only and the creditors don't have that number. They get lots of letters in the mail but they are thrown away unopened. They keep their bank account balance under $200 in case the creditors would try to take their money. This has been going on for about six months now.
QUESTIONS:
What is going to happen? Can the creditors go after their social security/ Their pension?
Will they try to take their house?
What happens if they ignore court orders to show up in court to discuss the debt?
Will the creditors attempt to call and harass the neighbors and relatives?
What can they really do to collect from a couple of retired 70 year olds?
I think it depends on where they live. In texas, your home is protected from creditors, except mortgage and tax liens.
Unless it is railroad retirement......that is always different.
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