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Lucas

Joined: 11 Sep 2012

Posted: Wed Jun 18, 2014 10:26 pm Post subject: Debt

I was speaking to someone the other night, we got onto the issue of debt. They told me how they took out several credit cards (in their home country) and when the debt go too much, got on a plane and came to Korea. They've not contacted the banks, made no arrangement to pay any of the debt off. I just can't understand how anyone could do this...... Has anyone else done this?

ttompatz

Joined: 05 Sep 2005
Location: Kwangju, South Korea

Posted: Wed Jun 18, 2014 10:39 pm Post subject: Re: Debt

Lucas wrote:

I was speaking to someone the other night, we got onto the issue of debt.

They told me how they took out several credit cards (in their home country) and when the debt go too much, got on a plane and came to Korea.

They've not contacted the banks, made no arrangement to pay any of the debt off.

I just can't understand how anyone could do this......

Has anyone else done this?

I'm sure there are a few who have run out on their debts at home.

The only problem is, depending on where you are from, the simple fact that it can take from 7-10 years to disappear from your credit score / credit report
and
even after that - those particular companies that you ran out on (Visa, MasterCard, Discover, etc) can still see your old file with them (it never disappears, they just can't report it to others) and they will probably never grant you credit again.

In some counties it can be a criminal offense if you get the cards and knowing of your intent to leave then run up the cards with no intention of payback (onus on you to prove otherwise). It goes from the realm of unpaid, unsecured debt to fraud.

.

Lucas

Joined: 11 Sep 2012

Posted: Wed Jun 18, 2014 10:48 pm Post subject:

Quote:

6 in the UK I think.....

If this affects you - do something about it!

radcon

Joined: 23 May 2011

Posted: Wed Jun 18, 2014 10:54 pm Post subject:

Future credit worthiness aside,in the US that person's ability to get hired for a new job, rent an apartment, get car insurance and other things will end or be greatly curtailed.

Fox

Joined: 04 Mar 2009

Posted: Wed Jun 18, 2014 11:17 pm Post subject:

Lucas wrote:

I just can't understand how anyone could do this......

I can understand it. I wouldn't do it, but I can understand it. The world is filled with people who choose present pleasures or benefits at the expense of future complications. This is just one manifestation of that behavioral pattern.

KimchiNinja

Joined: 01 May 2012
Location: Gangnam

Posted: Wed Jun 18, 2014 11:21 pm Post subject:

It's called "strategic default" to use a fancy word. Not sure why you "can't understand how any can do it". You just don't pay it back, done.

le-paul

Joined: 07 Apr 2009
Location: dans la chambre

Posted: Thu Jun 19, 2014 12:59 am Post subject: Re: Debt

Lucas wrote:

but you can understand how banks and loan companies etc etc can lend money to people knowing that theres either no possibility of them ever being able to pay it back, at a ridiculous high percentage or trapping people when they are students with an overdraft knowing that theyll have them by the short hairs for life...
etc
etc
etc

?

KimchiNinja

Joined: 01 May 2012
Location: Gangnam

Posted: Thu Jun 19, 2014 1:22 am Post subject:

The topic no doubt descends into a discussion of morality, which I don't recognize as existing... But as Le-paul brings up, if you start talking about borrower morality, you need to also talk about lender morality. It's a lopsided situation because the lender seeks to enslave the human race with debt (morality does not exist in the finance profession). Yet the borrower is brainwashed that they have a moral obligation to repay the debt. So from the beginning things are stacked in favor of the savvy 1% becoming richer and the naive 99% becoming poorer. As a finance professional I would encourage the 99% to strategically default when they learn they have been subject to immoral finance trickery, that balances the game.

Dr. Lipschitz

Joined: 30 Aug 2013

Posted: Thu Jun 19, 2014 7:05 am Post subject: Re: Debt

ttompatz wrote:

Lucas wrote:

FALSE-

Visa, Mastercard, Discovery, etc... do not issue credit. They are contracted by banks to provide a means to use credit. THe funds and credit are issued by financial institutions such as BOA, Wells-Fargo, CHASE etc.

Lucas

Joined: 11 Sep 2012

Posted: Thu Jun 19, 2014 3:10 pm Post subject:

Quote:

The topic no doubt descends into a discussion of morality, which I don't recognize as existing...

But as Le-paul brings up, if you start talking about borrower morality, you need to also talk about lender morality. It's a lopsided situation because the lender seeks to enslave the human race with debt (morality does not exist in the finance profession). Yet the borrower is brainwashed that they have a moral obligation to repay the debt. So from the beginning things are stacked in favor of the savvy 1% becoming richer and the naive 99% becoming poorer.

As a finance professional I would encourage the 99% to strategically default when they learn they have been subject to immoral finance trickery, that balances the game.

I'd like to eat 30 cookies in one sitting, but I dont.

le-paul

Joined: 07 Apr 2009
Location: dans la chambre

Posted: Thu Jun 19, 2014 3:26 pm Post subject:

Lucas wrote:

Quote:

I'd like to eat 30 cookies in one sitting, but I dont.

A very rounded, deeply invested argument there - youve convinced me!

Who's Your Daddy?

Joined: 30 May 2010
Location: Victoria, Canada.

Posted: Thu Jun 19, 2014 4:45 pm Post subject:

KimchiNinja wrote:

As a finance professional I would encourage the 99% to strategically default when they learn they have been subject to immoral finance trickery, that balances the game.

I don't think it's trickery. People willingly take on the debt. They made an agreement and should honor their agreement.

Many people feel entitled to material items without having the ability to pay for them. Their sense of entitlement is the problem - the government nor other citizens or banks owe them anything.

Some people think, "I deserve to own a house." And they walk into the bank and say "you must lend me money to buy a house." And if the officer says, "we can't you lend you any money," they'll blame the bank - like the bank owes it to them to fund their life. And if the bank lends them the money, and they can't pay it back, they'll blame the bank too!

KimchiNinja

Joined: 01 May 2012
Location: Gangnam

Posted: Thu Jun 19, 2014 5:07 pm Post subject:

Who's Your Daddy? wrote:

KimchiNinja wrote:

As a finance professional I would encourage the 99% to strategically default when they learn they have been subject to immoral finance trickery, that balances the game.

I don't think it's trickery. People willingly take on the debt. They made an agreement and should honor their agreement.

Sure, you mirror the common belief. So great, you can pay back the debt.

As far as trickery, I have a lot more experience exploiting the masses with finance than any of you guys. We employ trickery beyond the beyond, and rely on people believing it was their choice, and that they "should' repay. That's how the game works.

Fox

Joined: 04 Mar 2009

Posted: Thu Jun 19, 2014 5:15 pm Post subject:

Who's Your Daddy? wrote:

KimchiNinja wrote:

As a finance professional I would encourage the 99% to strategically default when they learn they have been subject to immoral finance trickery, that balances the game.

I don't think it's trickery. People willingly take on the debt. They made an agreement and should honor their agreement.

Most such agreements include terms clarifying what happens in the case of default. Accordingly, one can often default upon such an agreement while still honoring its terms. Now, unlike our KimchiNinja here I'm not inclined to take the matter of ethics off of the table entirely, but he's correct both in his depiction of the matter and in the remedies available to the common man. There is nothing immoral about realizing one was taken advantage of and then making the best choice available to one within the bounds of the agreements which one has made.

Ultimately, a lender's bottom line is 100% the lender's responsibility about which to worry. Devising "morality" so as to ensure lender profits while pushing as much of the risk as possible onto the borrower is chicanery.

Who's Your Daddy? wrote:

Some people think, "I deserve to own a house." And they walk into the bank and say "you must lend me money to buy a house." And if the officer says, "we can't you lend you any money," they'll blame the bank - like the bank owes it to them to fund their life. And if the bank lends them the money, and they can't pay it back, they'll blame the bank too!

There is another side to the matter: houses are as ridiculously as expensive as they are in part because bank lending drives up the prices, which in turn means people often cannot afford a house without borrowing the money, which in turn means that lending practices actually do play a role in final outcomes. I'm not saying you need to cast aside all notions of personal responsibility, but let's not ignore the complicity of our banking industry in outcomes here.

Weigookin74

Joined: 26 Oct 2009

Posted: Thu Jun 19, 2014 6:13 pm Post subject: Re: Debt

le-paul wrote:

Lucas wrote:

You know I worked for a year for an American credit card company from Canada. I dealt with American customers. At first, they had Doctors and Lawyers with 10 and 20 K credit limits and low interest rates. You had poor subprime people with 500 dollar credit limits with high interest rates. Then, getting into 2006ish, these high earners were cut down to 500 dollar limits and the subprimes were boosted to 10 k, 20 k, or 30 k limits with high interest rates and no hopes of repaying. Seems many companies in the States got into the action with the mortgage companies doing it first.

At the time, I couldn't understand it. It made no sense to me how they could afford to financially do this. Then, it became about selling additinal products to people they didn't need. I hate to say it, but certain poor demographics that you could tell over the phone by the way they spoke English were the ones falling into these scams. Made no sense to me and I even spoke up about it. Folks at the top in all their wisdom thought the latest thing was to market bad debt into risky derivatives. They never thought that folks would eventually default on these things? Of course after 2008, this company, along with many others got bailed out by the US government. Go figure.

But companies deliberately trapping folks into debt is as unethical as folks running it up, having a good time, and then forgetting it.

Banks trapped me with credit card temptation. Though some of it was being in the right place at the right time as student loans never provided enough to live on through the year and the Maritime economy was never famous for having lots of jobs. So, after resisting for a long time, I eventually took some cards. Getting towards my final year, I ran out of money and had to drop out as a company that was hiring was doing so during daytime hours. (I had to do 5 years due to changing majors.) I worked for a couple of years, then went back. The conomy was slightly better and I worked out a deal to do a few hours a week part time with one company I had worked for during a few months prior. Job ended with a layoff in December. A loophole let me collect EI in spite of being University. I graduated that spring after several years. (Not several years in university failing - though the financial stress did cause the GPA to take a nosedive.)

Anyways, getting trapped in a position that I couldn't pay and wasn't making the kind of salary a university grad would expect. I had no choice but to default on 2 out of 3 cards. So, while working and finishing that last year of uni later on and eventually preparing for Korea, collection agencies called and harassed. They were relentless and it was non stop. But I also learned that, in Canada, they can't touch you. They'll only go after you if you owe big bucks. They have to go before a judge to garnish your wages. But, for a few thousand bucks, it's not worth their time.

A few banking jobs might require a credit check, but most jobs in Canada do not or if they do, they don't hold a lot of scrutiny unless you committed actual theft like writing bad checks, stealing from the employer. The criminal check in more important. Things may have changed in the last several years I've been in Korea. But Canada was far more merciful in that regard compared to the USA.

By comparison though, university or college students have an easier time getting credit. But the rest of the working population cannot unless they get a secured card for a couple of eyars or folks have a high income or a good credit history. It's more strict in Canada,

Bad credit stays on your record for 6 years in Canada. After several months in Korea, the bad credit fell off my record. I had a small 500 dollar card I did keep the payments up on over the years. It never got increased and for a couple of years it had to be renewed yearly. I always kept it near it's limit for fear they'd eventually take it away. I almost let it go, but for some reason didn't.

Thankfully, in Canada, bad credit and defaulted credit cards eans existing credit won't be taken away from you or existing bank accounts won't be closed. In the US it may well be. So, Canadians definately have better consumer protections. I'm a free market center right thinking kind of guy, but support these protections for consumers wholeheartedly. Not everyone who defaults is a lazy no good live it up freeloader. Some people have very good reasons and there's a lot of uethical behaviour to go around.

Because of a fair system, I got to eventually rebuild and repair my credit. For years, I had to live on cash and go paycheck to paycheck. I could get no loans if I needed a car. I had to put dollars aside to do everything I needed or rob Peter to pay Paul. I lived in a bad economic place. It was just a fact of life. I got called repeatedly and harassed. It sucked. I had to fall behind in bills sometimes to do things like buy a passport, buy some luggage, get some vaccination shots, etc all in the name of coming to Korea. Then I had to catch up the bills for 2 or 3 months and stay in and not go out at all. Took me a year of start and go before I could finally do what I needed to inorder to get over here. (This was befoer apostiling documents, criminal checks, and the like. So, now would prob be even more out of reach.)

When I did leave, I left a bunch of bills behind. I told my landlord of several years, I'd pay him off within six months. Since the company had a history with me, they said ok. I paid back some relatives I had to borrow some. (First month, I needed 1000 K to live off and culdn't fully raise it all.) My phone and power was behind. I also borrowed some money from my sister to buy a clunker a year or so earlier and it still wasn't paid off before coming over. One of my relatives selling the car for me after I left still left me owing 3 or 400 bucks to my sister.

Well, between owing the money and getting myself set up in Korea (buying bedding, curtains, a desk, getting a laptop, etc), I had to spend almost 5 k over my first 6 months here. I sent a lot of money home and paid every red cent I owed to everyone. (Of course the old charge cards from years ago, I ignored because they were jerks to me for years.)

After that I had to start making payments on my loans, just the minimums but were quite a bit. Maybe 580 a month. (I had a few months on my interest relief period after coming to Korea, but could no longer claim because I was a non resident of Canada.) My 500 dollar card, I also paid off once getting here. I charged and paid off a couple of times over several months here.

This, combined with repayment on student loans, led to my card becoming an 800 dollar card. Around this time, the bad credit fell off as it wa over six years. Then, the card went up to a couple of thousand. I had two banks that I switched to online before coming to Korea. Anyways, several years later, bad credit is a thing of the past. MY available credit from two or three banks long exceed what I ever had before.

I don't default because I love the security blanket feeling if I ever got into a jam. Last week, in between pays, I had to fix something on my car. Ten years ago, this scenerio would have scared me to death. "How do I get the money", "WHo will lend me money", and "How long can I go without eating"? Now, I just put in on the card and pay it back eventually.

Defaulting does have long term consequences. Economic security does have great advantages. Debt is problematic. Interest does eat you alive.

It's a bad idea to default if you come here, though I can understand why some are tempted. You will have to live here for several years. Sometimes, only credit card debt goes away but student loans don't as quickly disappear depending on the country.

You will be stuck here for years and fearful of going home. Going home means you'd better have thousands of dollars saved becasue you will have no credit history and it will take a long time to rebuild unless you walk into a high paying job.

If I hadn't of kept that one card, it would have been difficult for me to rebuild after coming here. English teachers use to make good money but still had to live on cash. Now wages are less in some places compared to living costs and you still have to live on cash.

I can attest to the fact that living on cash sucks. No credit or a bad credit rating, you live like a second or third class citizen.

I am indebted now, as a dropped exchange rate for 5 years limited my ability to pay student loans and I did take some trips and get a used car, pay some key money deposit for my own, etc. Credit cards shot up. I should be scott free with everything in a couple more years or near to that I hope.

Going to Canada means my credit is already established and some cash in the bank will mean I can rent a place in a big city and take my time looking for a job I want if that's what I choose to do.

Thanks for reading my rant. My point is our decisions do have consequences whatever we decide. Make the right choices and benefit. Make the wrong choices and suffer.

PS It does suck when I have to live frugally paying things down when other foriegners get to blow their whole check every month and party it up all up and down the peninsula. But, these folks will have nothing one day.

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