So - someone who fills out an application for a Credit Card that's offered at %10.00 interest and then maxes out that card you're suggesting that the person applying and spending isn't responsible for his decision to spend that money?
It's a two way street.
The only thing the debtor is obligated to do is pay off the agreement as per the contract or accept the consequences of not paying off the agreement as per the contract.
They are faced with a choice, both of which will have ramifications.
Well - if someone racks up $20,000 in CC debt then, I think, they DESERVE to be in debted until they pay it off. Maybe if people couldn't bail easily from their decision to be careless with their hard earned money then less people would be in debt.
Actually, more people would be in debt with your system because it would reward the credit companies for
their bad decisions by making sure they would always have long-term profitability, even in cases where they made horribly stupid business decisions.
By rewarding their bad decisions, they will only make more of them. Thus, more people who are irresponsible will be given credit that they don't deserve.
Sub-prime mortgages are a prime example of stupid decisions being given positive reinforcement.
Just because the money is THERE for someone to spend doesn't mean it's wise for them to spend it.
Absolutely. But making
your money available for unwise spending from someone else is even
stupider.
Yes, the company is not responsible for YOUR decision. They are responsible for THEIR decisions. The failed company, however, IS responsible for their end of the deal. They are responsible for their own failure - they had the business and failed to run it properly, etc. . . . same thing - it's a two way street of responsibility. Both sides are responsible for their SELVES.
They are
absolutely responsible for their debtors decisions because they made the CHOICE to let the irresponsible people have control of their money. Their choice is the first one in the chain. All subsequent choices made by any party are directly related to that primary choice.
If I give a stranger my debit card and let them make purchases with it unsupervised, under the
hope that they will be responsible in their purchasing and pay me back with interest, that person is not responsible for my empty bank account at the end of the day, I am. I made a very stupid decision and I should suffer the consequences of my stupid decision
in full.
And so letting people who CHOSE to borrow money slide from their agreed debt is ok? Why is that ok? I just don't meet you on that.
They receive other consequences that are pre-set into the system. i.e. credit score damage, inability to get future loans, etc.
Why is it OK to absolve the lenders of their CHOICE to make a stupid investment?
If someone doesn't want to be IN massive debt then they should GO into massive debt. It's a no brainer.
Obviously. And if someone doesn't want to lose on a bad investment, then they should not make bad investments.
Your way of viewing things ignores the fact that the credit companies are making investments with every credit card and loan they give out. Its a choice.
What do you think people rack up massive debt for, anyway?
Because lenders make stupid investments on irresponsible people. That's the first stupid decision in the chain of stupid decisions.
I knew someone who was in debt for $35,000 - and she posted online to ask for help because she was behind on her payments and her next payment was $800.00 . . . after indulging that she had just purchased a bedroom furniture set on her card.
Almost all of her $35,000 debt was JUNK - crap she didn't need. Not medical bills (she's military - all of that is covered) Not education (again, covered) nothing unexpect - just her stupid decision to spend spend spend, buy buy buy.
What an
astoundingly stupid investment made by these lenders. They let this irresponsible person have control over
$35,000 of their money?!?!?!?
What idiots.
Believe it or not individual people should KNOW whether or not they can afford ___ or pay back ___. Adults should be capable and responsible for ensuring that they don't take on too much debt and their debt doesn't get out of control with frivolous spending.
Should statements are by nature irrational. What you think should happen isn't the reality. The reality is that many adults are not capable and responsible. The simple act of being lucky enough to live for a certain number of years does not imbue wisdom upon a stupid person.
Instead, working with reality instead of idealism, a person or entity has the duty of making making wise investments with their money. They are the ones fully responsible for what they do with their money.
If they make stupid decisions with their money, such as letting someone who is not responsible and capable have control over it, they deserve to lose that money. Simple as that.
If they decide not to take less profits or mitigate their losses, that's an even stupider decision on the lender's part.
I was a frivolous spender - I maxed out all of my credit cards - and guess what. I, being a decent person, accepted my RESPONSIBILITY and made adjustments in my budget - controlled my excessive spending - and PAID my DEBT OFF completely. I could have just freaked and said "it's tooooo much!" and even sought to end my debt but I didn't - I paid it off in just TWO years and now the only debt I have is vehicle and mortgage.
The bank was wise to invest their money with you, then. There's nothing wrong with being a wise investment.
Sure, life happens - and when it does there should be flex - but no one should ever be relieved of their debt when the main issue is that they borrowed too much money from too many people and went out to eat every Friday at La Vahn.
The problem is that you ignore the main issue which is that the banks are making stupid investments and stupid decisions.
Let's look at my own situation for a moment. I bought a condo in 2005. I wasn't aware of what the banks were doing with subprime lending when I made this purchase (which is my fault. It is my duty to be informed of these things, and I have since rectified my ignorance).
Anyway, I bought the cheapest condo I could find at the time, and made sure that I could afford the payments easily with my income. The building I purchased in had 72 units. It was a rehab, and all 72 units were for sale. I purchased the 3rd one, which actually made mine tied for the cheapest of the 72. They raised prices 3 times before they had all of the units sold, and I thought I had 15K of equity built into my unit and was very happy in my ignorance.
Unbeknownst to me, the banks (including the one I borrowed with), were giving out loans to people with bad credit scores. Really bad credit scores. People
known for defaulting on debt. They happen to have given many of these types of loans to people who purchased in this building. These bad investments accounted for
23 foreclosures in my building over the last 5 years.
I went from having a condo worth more than what I paid by 15K, to one worth less than what I paid by 70K. Not once have I been late on a payment. If I decide to continue to pay my mortgage, and the value of the property rises an absurdly optimistic amount of 5% each year, the point where my decreasing principle will meet the rising value of the property is 6 years form now. It's a one bedroom I purchased as an investment.
Did I make a stupid decision buying a condo while being ignorant of what the banks were doing with their money? Sure. I absolutely accept my responsibility for that stupid decision. What I've lost is the full amount I have paid in my mortgage and interest over the last 5 years as well as my down payment. I will never see that money again.
The bank, on the other hand, hasn't lost a dime on
their investment in me. They've profited thus far. If I continue to pay, they will continue to profit.
But the bank made a stupider decision by allowing people who were
not good investments make decisions with their money. I know for a fact that multiple foreclosures in my building were from loans that came through the same lander as mine, as well as a lender that has since been purchased by my bank.
My losses over the last five years are entirely due to my own stupid decision to buy at the peak of a market that had a foundation of sand. I accept those losses. I put my money (as well as the banks) into a stupid investment.
But the bank has
also made a stupid investment in this situation (multiple times over since at least 6 of the foreclosures in my building were from loans granted by my lender). It invested in my condo even more than I did by allowing me to make my stupid investment with
their money.
They actually had more information than I did when this investment was made, because they
knew that they were making
really stupid investments elsewhere.
Yet, thus far, they haven't lost anything on
their stupid investment because one aspect of that investment (me) was a good one, and I would have been relatively assured to remain a good investment if not for their stupid decisions. Some of these stupid decisions on their part include their persistent rejection of a restructuring of my loan to a lower rate to decrease my payments (If they allowed this, I would rent out my condo at a much lower loss than what I would now).
They would
still profit on my loan at a lower rate, but they don't believe I will allow it to go into foreclosure in part because I have never missed a payment. People who miss payments are being allowed to restructure while those who haven't missed any payments aren't being granted this option for some reason.
The bank is using the properties absurdly decreased value and the fact that I'm way underwater on the property as their basis for rejecting my restructuring offer. They feel safe in doing this because they are just stupid enough to think I still give a **** about my credit score so they assume I won't make the decision to let them become the proud new owners of a worthless condo.
Here's the ****ed up thing, though. When you add together what I've paid in front-loaded interest thus far, they would not actually lose all that much money If I let it go into foreclose if they manage to sell it off quickly at the current rate (which has been happening with the more recent foreclosures in the building). The only losses they will have will be on the cost of it being in foreclosure. And even still, they could still end up breaking even when it's all said and done.
While I'll have lost every cent I've paid over the last five years in down payment, taxes, principle and interest, association dues, and maintenance. This number
far exceeds any amount they can
possibly lose at this point on the joint investment.
So the question is, why should
I continue to
lose money while they continue to
profit off of what is essentially an equally stupid investment on their part?
They were given the opportunity to continue profiting (just
less profits) and they made the very,
very stupid decision to reject that offer.
This
assures that they will cease to profit, and instead will lose on their stupid investment and subsequent decision to not make a smart alternative investment.
