Personal Debt

dkb123

With the repayment holiday for credit cards and overdrafts coming to an end, and the forecast of mass unemployment after the furlough period ends, should we be campaigning for a different system of dealing with Debt Relief and Bankruptcy? 

woodbine

Hi there are of course DRO for people in less than £21,000 of debt and bankruptcy laws are not as harsh as they used to be, but it should always be seen as a last resort, step change are great for anyone struggling with debt:
https://www.stepchange.org

dkb123

I thought the conditions of a DRO were the same as a Bankruptcy, only the DRO is £90 and the other is £650 so why is it the last resort?

woodbine

DRO is simlar to bankruptcy but for lower amounts i.e under 21k and isn't suited for everyone, it's the last resort because there are other options e.g a DMP and if you are a homeowner you risk losing your home, if you are having financial problems its worth talking to stepchange before making any decisions.

dkb123

I don't have that problem it's over 25 years  since I found myself in that situation, but It changed my perspective about debt,
I came to realise that money is only a commodity and most lenders have long since got their return on the investment before the loan comes to an end.or they claimed on their insurance to cover the loss.
 I was hoping to stimulate a discussion on a subject that a lot of people find shameful or an admission of failure when they hit financial problems 
 

Chloe_Scope

Hi @dkb123, thank you for sharing this with us. Were there any elements in particular that you were wanting to discuss?

dkb123

there is a lot of stress  and mental health problems linked to debt and societies attitude to it, there are also people around that profit off  and exploit the situation, and I wanted to know how people feel about vulnerability and self-worth, in modern times as opposed to what I think is sometimes victorian  a view, money, in my opinion, is just a commodity that is traded and it is the lack of knowledge that leads to the fear  

Chloe_Scope

That's interesting. I imagine there is a lot of research out there on that! Hope you are doing well @dkb123! 

dkb123

Why is basic finance  not taught in schools, the concept of  business insurance which pays off the debt and then  the creditors or banks bundle them together, and  sells it on for pence in the pound to collectors who rely on ignorance, that the money is no longer owed, and use unlawful bully tactics that reinforce the myth that  the debt is still in force 

Tori_Scope

Very true @dkb123. I don't know much about personal finance, and everything I do know has been self taught! 

woodbine

There is far too much pressure on existing curiculam in schools to start adding more, in a perfect world kids would be taught more about money, but it's not a perfect world, most of us pick it up as we go along, I had my first bank loan for a car aged 19, my first mortgage at 21 my first credit card at 22, nobody taught us anything we just picked it up.

dkb123

I think lifeskills are far more important than half the subjects at school and  the of lack of knowledge about  finance has too many serious consequences to be picked up as you go along 

Cher_Scope

@dbk123 I entirely agree.  There has been a real push for money management to be added to the citizenship part of the National Curriculum in recent years which I think it a positive move.  In-fact, Martin Lewis is a big champion of it and recently co-funded the first-ever financial education textbooks >> https://www.moneysavingexpert.com/news/2020/07/martin-lewis-financial-education-textbook-rolled-out-to-700-scho/

I know I could have done with this back in the day so lets hope it helps future generations.

dkb123

I would say he is one of the most helpful national figures of the last decade 

dkb123

I must say that I am disappointed that this board is so inactive, the huge financial crisis that is going to hit us, is just weeks away, and the defaults for personal debt is going to be horrendous, the unemployment figures will be unprecedented,don't people see what's coming 

poppy123456

That doesn't mean they have a question to ask, which is why a lot of people come on internet forums in the first place.

dkb123

well I would disagree, forums are for comments and chat not just questions 

leeCal

I was taught a little about finances when I was a young adult by my father. Then later I learned a bit more from the world. Surely parents can teach a little themselves as @woodbine says the curriculum is full as it is. 

Ive spent my whole life trying to pay outright for everything as I went along. I had to have a mortgage however and that turned very sour in the recession in 1989. Apart from that, though I’ve not had much, it was all paid for and as a consequence I am debt free. Of course I’m not immune to any huge financial crisis which may come but not many of us are and we are all pretty powerless to do much about it if the worst should happen. Let’s plan for the worst but hope for the best.

poppy123456

Yes but a lot of people don't think that way. Especially in this part of the forum as it's for questions regarding Universal Credit. We have a coffee lounge that a lot of people go to to talk about various things. Pop over and take a look. https://community.scope.org.uk/categories/coffee-lounge

dkb123

@leeCal, One of the old sayings is never a lender nor borrower be, which is nonsense, the world survives on debt and the economy would collapse without it, there used to be a well-known scam that added all your income up over your lifetime and said if to don't spend, you would be a millionaire in 5 years , because of compound interest, As anyone ever come across a compound interest account which paid the full rate, I think not, and although the bank rate is half a percentage, credit cards are charging 28% from the money that comes out of thin air  since it is only created from your signature  

Chieng47

dkb123 said:

Why is basic finance  not taught in schools, the concept of  business insurance which pays off the debt and then  the creditors or banks bundle them together, and  sells it on for pence in the pound to collectors who rely on ignorance, that the money is no longer owed, and use unlawful bully tactics that reinforce the myth that  the debt is still in force 

Do you have a link to something that says that once a debt is sold that money is no longer owed?

Oxonlady

Oh, Chieng47, could this really be true?
I have a long-standing debt from around 20 years ago, which my bank sold on to a credit company. Although I'm only able to pay £1 per month, they are refusing to write off the debt, even though they know that I have been ill and disabled for a long time. This situation will not change. 
This is of course very stressful for me and if there really is a legal way to get this debt written off, I would be most grateful. 
Thank you. 

dkb123

Technically once the debt is sold to a third party , you have no contract with them and you should ask for proof of an assignment , which of course they will not have because these things are purchased in job lots for  pennies on the pound, so you write and offer a full and final settlement of £5 if they don't play ball go to the Citizen advice bureau who will help you make a complaint to the FCA regarding the companies disregard of the rules for forbearance, in your treatment , you can also force the company down the mediation route, but I am not a legal adviser