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 can’t 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 ‘because that’s the law.”

However, there is a savior and it’s 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.

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.

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!

Would you care to share how to convince a bank or other lender how to make the loan nontransferable.

thank you

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.

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.

I cannot believe there is anyone, anywhere who has not been told read any contract you sign? I did this many years ago and Wow!
Then I understood what I was up for. You can certainly talk to the bank but basically they have heard it all before and there are only two ways to go. The hard way and the even harder way.
People have responsibility put upon then whether they like it or not and banking is slowly reformed by the law and bent by the banks.
Barry Humphries's Mother got it right " The banks lend you money like an umbrella for a rainy day and when it starts raining they take it back".

It could be difficult to have a bank agree to make their loan completely non-transferable, but it may be possible to limit in advance the number and nature of entities to which the loan can be transferred. Commercial debt-collector firms, for example, are a reasonable choice, whereas political parties and other crime syndicates, are not.

Easy solution: don't borrow. If you can't afford to pay up front, don't even think about buying whatever you think you want.

Easy solution: don't borrow. If you can't afford to pay up front, don't even think about buying whatever you think you want.

This kind of comment strikes me as being made my someone who lacks experience at the business of living life.

There are many reasons people borrow money. Many people borrow money to try to get ahead in life.

When I buy shares in a company and it goes broke and I loose the lot I get told "ah well, that's the risk you take when you buy shares, too bad."

Why then, do these same people, and the law, not take the line and say to a lender when a borrower looses their job and can no longer make payments "ah well, that's the risk you take when you lend money, too bad." After all, nobody forced the lender to lend the money did they? The lender knew the risks and they were taking.

I suppose I was brought up in a different era when debt was frowned upon. There is good debt and bad debt. Debt for production is good, but for pure consumption should be avoided. The whole world is floating on a sea of debt, most of which will never be repaid and is the reason why we are in such a parlous situation. I watch with dismay as (particularly Young) people buy new cars on a small deposit down, drive out of the showroom and immediately lose thousands of of dollars in depreciation and continue to pay extortionate repayments for several years. No one one wants to save these days. It's very much an "I see, I want, I must have" society and we are mortgaging our future in every sense of the word. Do they actually teach basic economics at school these days ?

Referendumandtherestofit,

I've had 73 years of living experience, so what's your fall back position? I repeat, if you don't have the money, don't buy it. Apart for a mortgage, there is no sensible reason to borrow money. Most people who don't have enough money are poor managers. It's not how much you have or earn, it's what you do with with what you have. We are in the grip of consumerism and immediate gratification, plus the idea that we are all entitled to what wealthy people have, even if we haven't earned the right, or had it left to us by people who did earn the wealth. The sense of entitlement and 'equity' seems to have been bred into the last couple of generations. The unrealism of modern beliefs is not the fault of big business, banks or politicians - it's all down to the pumped up, unrealistic expectations and greed of individuals.

The younger generations seem to have such unrealistic ideas and demands.
Kind of ironic since many of them don't move out of home now till they are into their 30's.

Well said ttbn. With the exception of a home mortgage, I see little need to go into debt unless it's to finance a business or similar. It seems cars, iphones, Tvs, smoking, raging, eating out, drinking, concerts etc all have priority over saving a dollar or two to invest in the future.

The whole world is floating on a sea of debt, most of which will never be repaid and is the reason why we are in such a parlous situation.

Ever wonder to whom we are in debt to and why. I think everyone would be advantaged to learn that because our goverments gave away the right to create moeny using the same method banks use, they dont real eyes that interest used to pay debt also has be borrowed somewhere along the line becuase where does it come from otherwise?

In the words of Lincolon: "The government should create issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity.

By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government.

Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power."

Senate document 23, Page 91. 186

Referundemdrivensocienty,

The reserve bank printing money is sheer suicide. It was tried in Germany and Argentina, and shortly both currencies were worthless.

You have not discovered something that Nobel prize winning economists have missed.

Thought this might come up sooner or later.

Govts create only about 5-10 of all the money created, Govt usually bank notes and coins only.

Banks create 90-95% of all money in the economy.

There are no laws in any country that limit the amount of money banks can or cannot create. Think of their capability to create booms and busts that suits their plans here.

Banks can and do create as little or as much as they want.

In short, according to some commentators, yours and my signature actually, creates the money. Its the signature that kick off the money creation process. It cannot be kicked off without a signature.

Banks create accounts using the borrowers signature and make credit deposits into that account. When all the borrowers details are entered into the spreadsheet template, the last thing entered is the "loan amount." Until this number is written in, the account is not complete. When the number has finished being entered, the money is created out of thin air and the account is now established ready for the borrower, to access.

Its so mind numbingly simple that many people had a hard time accepting it.

If banks can do this so can govts and it has been done. How else do you think Australia got built between the end of WW2 and the mid 19070's? Using a tax base of about 10-15 million people?

Some reading material for you.

Chris Fields,(from NSW) Banks Lie
The Remarkable Model Of The Commonwealth Bank Of Australia

Video - Do Banks lend money they don't have?

I've had 73 years of living experience, so what's your fall back position?

My forward position is that I've had 63 years of experience, woopee doo.

My forward position is that I have made it my business to learn as much as I can about how the world really works.

I too like many everyone else was trained up the media to believe what the man on the TV says and have the views the media owners wanted me to have.

I was bred and raised by a diary farmer as lunatic right wing anti, anti, anti, commie hater.

After going out into the world I learned my parent given political education wasn't quite accurate and so after some years I voted for the other mob for a couple decades.

5 years after 911 I learned just evil some very powerful men are and what they will do to realise their dreams.

These days, I've learned the two party system is designed to box us into a choice the two parties give us. The evidence is the above and below the line voting.

The two main factions are simply two wings of the same bird of prey.

Our 'democracy' to use that term is slipping away from us we like all the other western nations, and we are slowly sliding in the big dark hole of tyranny.

As someone in history said, behind the curtain lurks someone more powerful than the king himself.

Ref,

You make Aiden look like a genius.

Shadow,

Far from being suicide, the Reserve Bank printing money would not be harmful. The Reserve Bank pays commercial banks interest on reserves, so functionally it's no different from borrowing from the bond market; the government is putting money into circulation and paying interest to take it out of circulation again.

Attempting to fund large foreign currency repayments by printing money and selling it to buy foreign money would be "sheer suicide" but nobody is suggesting we do that. Australia only borrows in Australian dollars.

_____________________________________________________________________________________

Referundemdrivensocienty,

"There are no laws in any country that limit the amount of money banks can or cannot create."
No absolute limit, but there are the Basel III capital requirements.

There don't actually need to be laws limiting the amount of money banks can or can't create, because the banks are limited by what they (and their customers) can do profitably. Central banks effectively control interest rates, and the higher the rates are, the less likely it is that an investment will be profitable.

I was listening to this week's 4 corners program on bank.

I remember, pretty well 100% sure...
One comment stated by Stephen Long was that over stating loan borrowers income. Stephen Long said banks are trying to get Mood's or S$P (forgot which one) ratings agencies' triple A ratings to allow banks to bundle up housing mortgages into securities, to sell off the bundled up mortgages.

Sound very Sub-prime to me. Scary stories, what will they think of next.

My theory would be banks are trying to maximise borrowers debt before the crash, sending borrowers into something similar to the last 8 years of Greece's depression.

I also tend to believe Australian federal election is being gotten out of the way before the 3rd quarter market decline.

Markets and media get to blame part of the reason for a major market slump on Donald Trump. Republicans and Democrats using Donald Trump to distance themselves from political the blame.

Stephen Long's website's many banking investigations.
http://www.abc.net.au/news/stephen-long/167162