Could you buy your own debt?

BodyButter

Vital Football Legend
#1
There is a story on the Guardian about Occupy buying up random people's debt and absolving them of it. For about $400k they bought $15m worth of debt. Apparently, in the secondary debt market debt is usually sold at about 5 cents on the dollar.

I don't have any personal debt but if I had a £10k credit card bill which I couldn't pay, could I default on the debt and then buy it for £500?
 

OnMeHeadFred

Vital Reserves Team
#2
BodyButter - 13/11/2013 09:08

There is a story on the Guardian about Occupy buying up random people's debt and absolving them of it. For about $400k they bought $15m worth of debt. Apparently, in the secondary debt market debt is usually sold at about 5 cents on the dollar.

I don't have any personal debt but if I had a £10k credit card bill which I couldn't pay, could I default on the debt and then buy it for £500?
Could you add a link, our kid?

I don't quite understand why ant-capitalists would buy debt which is an act of speculation.
 

BodyButter

Vital Football Legend
#3
http://www.theguardian.com/world/2013/nov/12/occupy-wall-street-activists-15m-personal-debt

They aren't speculating though. They are absolving people of the debt. I'm not sure they are anti-captialist either.
 

OnMeHeadFred

Vital Reserves Team
#4
BodyButter - 13/11/2013 09:17

http://www.theguardian.com/world/2013/nov/12/occupy-wall-street-activists-15m-personal-debt

They aren't speculating though. They are absolving people of the debt. I'm not sure they are anti-captialist either.
Thanks!

Their decision to buy up debts accrued through buying medical treatment seems like a laudable project.

As for buying your own debt, I think that is the same as what happens with bankruptcy or an Individual Voluntary Arrangement; you just pay back a very small proportion of what you owe, or nothing at all if you are certain football clubs.

It always seems that we are very soft on debtors in modern society.

Seeing how reckless some people are it is hard not to believe that they deserve the debtors' prison, like in Dickens.
 

BodyButter

Vital Football Legend
#5
If we are too hard on debtors, we won't be able to get them back into debt soon enough, lol.

12 months is the duration in the UK. That seems incredibly short to me.

Still, if you were to buy your own debt, you wouldn't be bankrupt. You'd probably have a shite credit rating though, which might be the same thing.
 
#7
Banks have already admitted that debt and the cashcow that comes from penalties is an income stream in domestic markets that they can't do with out, credit cards have followed suit by hiking rates and introducing usage fees for those who don't carry enough debt on the card to make them money so the whole system is designed to put you in debt and keep you there as it's the only way they make money.

The industry doesn't discriminate between those who fall on hard times and don't make them profit by lack of payment and those chancers who deliberate won't make them profit so you can't be harder unless they change their own outlook anyway.

That said, interest as a product is money for nothing carrying no subsequent loss when not returned outside of any interest gaining investment it could've be used for in the alternative.

Secondary debt market is even more of a cash cow when you look at the figures.

Individually bankruptcy.IVA is the way forward, but technically I doubt you could buy your own debt but you could purchase other peoples. I'm sure for DPA reasons you couldn't cherry pick defaulted accounts it would come as a block and it would be pot luck if you ever had one in there of your own?
 
G

Guest

Guest
#8
This is interesting tbh when me and the mrs was both in work a few years back before the kis popped out we had a credit card and owe about £1600 on it horrible being out of work and owing debt but we find ways of paying it tbh, we have just finished off a £5000 loan we had 3 years ago that was £80 a months ffs seemed forever paying that we pay £40 months on the CC but hope after to crimbo to up the payments to try and get rid of that debt but CC's are harder to pay off cos of the interest.
 

The Fear

A Wise Man (once sat next to him)
#9
OnMeHeadFred - 13/11/2013 09:30

BodyButter - 13/11/2013 09:17

http://www.theguardian.com/world/2013/nov/12/occupy-wall-street-activists-15m-personal-debt

They aren't speculating though. They are absolving people of the debt. I'm not sure they are anti-captialist either.
Thanks!

Their decision to buy up debts accrued through buying medical treatment seems like a laudable project.

As for buying your own debt, I think that is the same as what happens with bankruptcy or an Individual Voluntary Arrangement; you just pay back a very small proportion of what you owe, or nothing at all if you are certain football clubs.

It always seems that we are very soft on debtors in modern society.

Seeing how reckless some people are it is hard not to believe that they deserve the debtors' prison, like in Dickens.
There seems no stigma now does there? And an awful lot of both irresponsible lending but also irresponsible spending.

My dad was always right, don't buy what you can't afford. Very wise words.

I have no credit card debt any more and never will have again. :4:
 

BodyButter

Vital Football Legend
#10
It's how the world works. There is no way you a normal person could buy a house without winning the lotto or taking a loan. Even governments are up to their ears in debt.
 

thefacehead

Vital Football Hero
#11
Funnily enough I saw a documentary on Youtube the other day about how all money is created from debt.

Basically a bank invents money by having a new person coming in and taking out a loan. The money they lend is not theirs to lend as they don't have the equity to back it up if say everyone came and took all their money out at once, which of course would never happen.

I can't explain it very well but it was damn interesting, here's the link if anyone cares -

http://youtu.be/jqvKjsIxT_8
 
#12
Fractional reserve I think it's called. But it's a touch of a fallacy because whilst they don't have the physical coinage to pay if everybody withdrew money they do have it wrapped up in other things and so on.

But the part relating to interest creation from nothing in effect is pretty spot on.

And as BB says above, every country is in hock to financiers anyway, and China now have a big chunk of that I believe especially with the States.
 
G

Guest

Guest
#13
Yeah Mike watched a documentry on youtube about China and the US been high tensions between the pair since China bought US debt but they changed the curreny of the interest repayments the US has to pay them back in, China changed it to the Yen im sure it was that where the original debt was in US dollars so US would have to pay more interest or something like that.
 

david-avfc

Vital 1st Team Regular
#14
I don't think they are buying an specific individuals debt e.g. walking into a bank and saying can I buy Mrs XYZ's loan please. I expect they bought some debt based securities of some kind. They would have bought debt with a low credit rating so the bank would be happy to sell it on anyway. Winners all round though, banks get rid of their crap assets, individuals lose their debt and it won't affect their credit rating (but it would have been crap anyway)
 

david-avfc

Vital 1st Team Regular
#15
thefacehead - 13/11/2013 19:07

Basically a bank invents money by having a new person coming in and taking out a loan. The money they lend is not theirs to lend as they don't have the equity to back it up if say everyone came and took all their money out at once, which of course would never happen.
it happened to northern rock in 07
 
#16
That was the last run yeah, because of how quickly it happened they couldn't liquidate enough to cover and didn't have it in physical reserve, which is why the route to Gov took was daft because they were solvent as proved by their ability to pay people off including a nice 600K for their out going CEO who overstretched them.
 

kefkat

Vital Football Legend
#17
I got sick of companies ringing us (when we are on the no telephone service too) trying to get us to set up a debt management plan: They seemed not to understand we don't have debt. The only credit we have is with the bank for a credit card and overdraft when we need/use it.

If we hung up they just rung back. In the end I had to spell it out to them we didn't need their services and to take us off their list else I would report them. Seems to have worked so far.

We have a mail order catalogue and they are driving us round the bend as we only use it for emergencies, like the washing machine blowing up. Mr K told them if they don't stop ringing us he would cancel the account. We haven't had them ring for ages now. Nor have we bought anything from it in ages.

Don't like debt/credit: Rather use cash
 

thefacehead

Vital Football Hero
#18
david-avfc - 13/11/2013 20:44

thefacehead - 13/11/2013 19:07

Basically a bank invents money by having a new person coming in and taking out a loan. The money they lend is not theirs to lend as they don't have the equity to back it up if say everyone came and took all their money out at once, which of course would never happen.
it happened to northern rock in 07
I meant all of the banks in the world, but illustrates my point, they don't have the money to cover what's owned in hard cash.
 

thefacehead

Vital Football Hero
#19
mike_field - 13/11/2013 21:38

That was the last run yeah, because of how quickly it happened they couldn't liquidate enough to cover and didn't have it in physical reserve, which is why the route to Gov took was daft because they were solvent as proved by their ability to pay people off including a nice 600K for their out going CEO who overstretched them.

Why not watch the link I put on and you'll understand what I'm getting at better.
 
#20
Already seen the fractional reserve videos a few years back mate and it's one of the more recent conspiracies because it's not 100% accurate.

The interest is money from thin air, but the claims the principle is leveraged from nothing is wrong.