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The Forum > General Discussion > What no one ever tells you about your debts.

What no one ever tells you about your debts.

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Suppose, you borrow $10,000 from a bank to buy a car. You pay it all back accepts $1,000 then you lose your job. You canít pay it so the banks sells it to a debt collector.

When the bank sells (assigns) the debt to a debt collector they surrender all right, title and interest in the debt as a contractual condition. This protects the debt collector from future attempts by the bank to get any money back off the collector. The debt collector effectively pays out your debt to the bank.

The bank, claims on its debtor default insurance and gets $1,000 or most of it plus the money paid to them by the debt collector.

Debt collectors pay about 10 cents in the dollar for debts so they paid the bank about $100 for your $1,000 debt.

Now the debt collector can take you to court for the money. Know that if the debt collector gets that $1,000 off you, that money is going straight into their pocket, not to the bank.

Is this state of affairs whereby a person you have no contract with can legally take you to court and get the court to make you pay them $1,000 which will go into their pocket and now where else; fair, you decide.

If you want to fight it, where do you go for help? If you go to a lawyer or a legal aid organisation they will tell you to pay up Ďbecause thatís the law.Ē

However, there is a savior and itís a website in the UK. Now you must, understand, know and realise the laws and legal procedures in the UK are different than here in Australia, however they provide free resources, a free forum and the knowledge you will learn is pure gold. Know understand and realize that not everyone achieves success using their method but many do. Australians have had success using the method. You will see this on the forum. To ensure this post stays up, pm me for the website.
Posted by Referundemdrivensocienty, Saturday, 30 April 2016 12:35:54 PM
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I can see how it isn't fair that some other business can make a ton off a persons loan, but I can also see that if you give people incentive to not pay the full amount owing then you're giving them incentives to default.

If the bank said directly to its loan customers "We can see you're having financial difficulties, how about you just pay us back $100 in every thousand and we'll call it quits?"
Everyone would be saying they're having financial difficulties and no loans would ever be fully repaid.
Posted by Armchair Critic, Saturday, 30 April 2016 2:54:39 PM
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It's all in the contract:

If you take a loan, then you should make sure that the contract's small-print clearly states that the loan is non-transferable.

Otherwise, regardless whether you defaulted or not, suppose the bank sells your loan, but rather than to a debt-collector, it sells your loan to the Nazi party and now the Nazi party demands your payments, which rightly you morally refuse to pay into their coffers.

Take the step in advance to avoid such scenarios!
Posted by Yuyutsu, Saturday, 30 April 2016 8:43:21 PM
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Would you care to share how to convince a bank or other lender how to make the loan nontransferable.

thank you
Posted by Referundemdrivensocienty, Sunday, 1 May 2016 8:09:50 PM
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Firstly, as a matter of common law, debts are transferrable, unless specifically stated otherwise. (Which few creditors will accept) For example, I had a car loan with ANZ who sold their financing business and debts to Macquarie. For me this makes no difference as the payments are by bank debit.

Similarly as banks aren't in the debt collection business, they sell the bad debts to debt collectors (called factoring). However, in most cases it is for closer to 70-80%, and give you a bad debt rating.

Secondly, Banks are reluctant to do this and if good faith is shown by the debtor by going to the bank and explaining this, most often this can be restructured without the unpleasantries that cost the bank and the debtor money.
Posted by Shadow Minister, Monday, 2 May 2016 7:37:40 AM
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Referundemdrivensocienty,

I should advise you that some nice Nigerian has said I can claim a cool $million freeps if I contact him. Who needs your fix for debts?

Then again maybe I will do neither.
Posted by onthebeach, Monday, 2 May 2016 8:39:25 AM
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