Just wanted to point out while this is bad, I'd suspect a good portion of the debts or unpaid bills in collection are there because of incompetence and not because of deadbeats.
The hospital where my sister-in-law had her baby never sent her a hospital bill. Just put it to debt collections, for example.
My wife got a debt collections notice on an unpaid hospital bill. The bill was supposed to be payed by workman's compensation (she cut herself while working on a food truck). But they didn't pay for some reason and so it lapsed into collections.
And that's just been my experiences. I'm sure there are others like it.
Another factor is that you can negotiate with debt collectors. So people may be letting their bills lapse so they can pay much less than they would have had to pay. Of course, there are tax implications to this as the difference between the amount owed and the amount you pay is considered taxable income.
Cappy, I wouldn't say that the debt problem is due to low morals and/or freeloading scum. That may account for a very small percentage of the problems, but these numbers have been rising steadily since our " recession " ( which I call a DEPRESSION, and that I contend is still going on when raw data is looked at..).
Our unemployment situation is a major factor, as is the cost of medical attention sans decent insurance. That's a huge driver in bankruptcies.
5 years ago I made a decision to eliminate as much of my outstanding debt as possible because the job market in this country started imploding. I've basically been operating on a cash and carry basis.
But if I were to become unemployed AND ill.... well, that would be disasterous.
The credit card debt is rather stupid, but Americans have been sucking the credit teet for years, sometimes for frivolous nonsense, but sometimes because salaries have been flat for 3 decades, while consumer goods have been increasing ( with the exception of cheap, job destroying garbage imported from China, but that's a different issue ).
the govt is really just a reflection of the people with loads of debt and no plan to do anything but pay the minimum.
how the country can go thru 2008 where there was actual speculation and gossip the the usa might default and be right back in it again in 5 years is beyond me.
I'd be curious to see how many of these debts actually have final judgments behind them. In spite of substantial savings and the fact I always pay legitimate debts on time, I have debts "in collections" because, for example, the toll way authority wants to charge me for a car I no longer own (which is a statutory defense against the fraudulent charges). In the past, I've had debts sent to collections based on slamming (for which AT&T contractors were eventually criminally convicted) and a water company that misread my meter.
Any of these organizations would have lost at trial, and I strongly suspect many of those who are pretending to have accounts receivable are themselves committing fraud.
1948 didn't have a "hard working, honest, freedom-loving" America. It had an America increasingly calling for government action (social security had all ready passed) in order to alleviate people from personal responsibility. The supposed "greatest generation" was terribly scarred by WWII and promptly killed this country by being the generation that abdicated personal responsibility, giving us the "Great Society". Thanks.
Benjamin Rush served a sentence in Debtors prison while he was a supreme court justice. Good Ole' George went and visited him. That was in the late 18th century.
Problem is not a lack of hard work. Its that the money buys nothing anymore.
"The debt in collections ranged from as little as $25 to a whopping $125,000. But the average amount owed was $5,200. "
In other words, the *median* amount owed is probably no more than a couple of grand. People being hounded by the financial industry over no more than a month's income at minimum wages.
In a sane society, these people would not have access to credit. At all. Because it's a breach of ordinary prudence to lend to them. But the derivatives industry means you can get OPM by holding debt based on it's on-paper value, even if the real value of that debt is zero.
And "making money from money" is the biggest business in the developed world. How does a used car business make money? Selling cars? Barp! Thank you for playing! They make their money on the loans.
* Hand out bankrupcies like candy. * Tell these creditors they are idiots and will not be getting their money. * Make it illegal for bankrupts to borrow money and for people to lend to them. At the very least, loan agreements to registered bankrupts become *void* in law. Including credit cards and store credit. * Force the bankers, under threat of going to prison, to write down their bad loans.
Oh, the system would collapse. But maybe a better one would establish itself afterward.
Just wanted to point out while this is bad, I'd suspect a good portion of the debts or unpaid bills in collection are there because of incompetence and not because of deadbeats.
ReplyDeleteThe hospital where my sister-in-law had her baby never sent her a hospital bill. Just put it to debt collections, for example.
My wife got a debt collections notice on an unpaid hospital bill. The bill was supposed to be payed by workman's compensation (she cut herself while working on a food truck). But they didn't pay for some reason and so it lapsed into collections.
And that's just been my experiences. I'm sure there are others like it.
Another factor is that you can negotiate with debt collectors. So people may be letting their bills lapse so they can pay much less than they would have had to pay. Of course, there are tax implications to this as the difference between the amount owed and the amount you pay is considered taxable income.
Cappy, I wouldn't say that the debt problem is due to low morals and/or freeloading scum. That may account for a very small percentage of the problems, but these numbers have been rising steadily since our " recession " ( which I call a DEPRESSION, and that I contend is still going on when raw data is looked at..).
ReplyDeleteOur unemployment situation is a major factor, as is the cost of medical attention sans decent insurance. That's a huge driver in bankruptcies.
5 years ago I made a decision to eliminate as much of my outstanding debt as possible because the job market in this country started imploding. I've basically been operating on a cash and carry basis.
But if I were to become unemployed AND ill.... well, that would be disasterous.
The credit card debt is rather stupid, but Americans have been sucking the credit teet for years, sometimes for frivolous nonsense, but sometimes because salaries have been flat for 3 decades, while consumer goods have been increasing ( with the exception of cheap, job destroying garbage imported from China, but that's a different issue ).
the govt is really just a reflection of the people with loads of debt and no plan to do anything but pay the minimum.
ReplyDeletehow the country can go thru 2008 where there was actual speculation and gossip the the usa might default and be right back in it again in 5 years is beyond me.
I'd be curious to see how many of these debts actually have final judgments behind them. In spite of substantial savings and the fact I always pay legitimate debts on time, I have debts "in collections" because, for example, the toll way authority wants to charge me for a car I no longer own (which is a statutory defense against the fraudulent charges). In the past, I've had debts sent to collections based on slamming (for which AT&T contractors were eventually criminally convicted) and a water company that misread my meter.
ReplyDeleteAny of these organizations would have lost at trial, and I strongly suspect many of those who are pretending to have accounts receivable are themselves committing fraud.
1948 didn't have a "hard working, honest, freedom-loving" America. It had an America increasingly calling for government action (social security had all ready passed) in order to alleviate people from personal responsibility. The supposed "greatest generation" was terribly scarred by WWII and promptly killed this country by being the generation that abdicated personal responsibility, giving us the "Great Society". Thanks.
ReplyDeleteBenjamin Rush served a sentence in Debtors prison while he was a supreme court justice. Good Ole' George went and visited him. That was in the late 18th century.
ReplyDeleteProblem is not a lack of hard work. Its that the money buys nothing anymore.
"The debt in collections ranged from as little as $25 to a whopping $125,000. But the average amount owed was $5,200. "
ReplyDeleteIn other words, the *median* amount owed is probably no more than a couple of grand. People being hounded by the financial industry over no more than a month's income at minimum wages.
In a sane society, these people would not have access to credit. At all. Because it's a breach of ordinary prudence to lend to them. But the derivatives industry means you can get OPM by holding debt based on it's on-paper value, even if the real value of that debt is zero.
And "making money from money" is the biggest business in the developed world. How does a used car business make money? Selling cars? Barp! Thank you for playing! They make their money on the loans.
* Hand out bankrupcies like candy.
* Tell these creditors they are idiots and will not be getting their money.
* Make it illegal for bankrupts to borrow money and for people to lend to them. At the very least, loan agreements to registered bankrupts become *void* in law. Including credit cards and store credit.
* Force the bankers, under threat of going to prison, to write down their bad loans.
Oh, the system would collapse. But maybe a better one would establish itself afterward.