raging:

Why they should they bear the majority of responsibility? There should be equality of responsibility on this.

BTW - people do not get sent to jail for being in debt, in Victorian time maybe but not now. You will only get jailed if you are fined by a court and do not pay it back.

Did you realise that Bankruptcy only lasts 1 year then you are clear - Hardly dire consequences of being financially idiotic is it?

Well if I were the one lending money I would take every precaution possible to make sure it is paid back.  Why do banks not offer secured loans only thereby ensuring protection against the unexpected?  They must be extremely wealthy if they don't have to make insurance compulsory so I wouldn't waste my time grieving about how much the banks lose.  

No I didn't realise bankruptcy only lasts for a year - I assumed once you were declared bankrupt that meant no credit for life and I also assumed if people couldn't pay their debits a jail sentence was an option - so what deterrent is there for getting into debt?

rosiet2008:

 

 

Well if I were the one lending money I would take every precaution possible to make sure it is paid back.  Why do banks not offer secured loans only thereby ensuring protection against the unexpected?  They must be extremely wealthy if they don't have to make insurance compulsory so I wouldn't waste my time grieving about how much the banks lose.  

Couple of things to clarify for you. Most financial institutions offer Secured Loans but these do not provide any extra protection for the borrower only the lender. The "security" is your house and you borrow against the value of it, so if you cant pay the loan back you can lose your house. Even then there is no garauntee that they will recover all that is owed.

It is illegal to make insurance on loans compulsory, the FSA regulate the insurance industry and any lender found making the purchase of PPP (payment protection plan) part of the deal, or trying to tempt you by offering lower rates if you buy it, will instantly be fined huge amounts of money or even be shut down completely.

Another thing you are possibly not considering here Rosie is that people lie, yes people lie through their teeth to the bank and will actively hide the level of current debt in trying to get a new loan. Shocking isnt it?

On your last question, there is no real deterrrant anymore. In the past there was a stigma attached to debt and if you were found to be one of those people who did not pay thier debts then you were shunned socially. No-one cares about that anymore, there is no apparent problem with being a thief and a liar now (which is what you are if you can pay but wont).

raging:

Couple of things to clarify for you. Most financial institutions offer Secured Loans but these do not provide any extra protection for the borrower only the lender. The "security" is your house and you borrow against the value of it, so if you cant pay the loan back you can lose your house. Even then there is no garauntee that they will recover all that is owed.

It is illegal to make insurance on loans compulsory, the FSA regulate the insurance industry and any lender found making the purchase of PPP (payment protection plan) part of the deal, or trying to tempt you by offering lower rates if you buy it, will instantly be fined huge amounts of money or even be shut down completely.

Why is it illegal, I wonder, for insurance on loans to be part of the deal? 

On your last question, there is no real deterrrant anymore. In the past there was a stigma attached to debt and if you were found to be one of those people who did not pay thier debts then you were shunned socially. No-one cares about that anymore, there is no apparent problem with being a thief and a liar now (which is what you are if you can pay but wont).

The thought occurred to me after I posted the question about deterrent was that your own piece of mind would prevent you getting into debt (or should I say MORE debt given that most people are in debt already if they have a mortgage) but it doesn't seem to work that way - the more banks loan the more some people are willing to borrow.  Not sure how people manage the can pay but won't pay scenario - if they could wouldn't they pay it off (or am I being very naive here?! )  

p.s. I suspect the biggest thieves are those who those who charge interest at exorbitant rates whilst paying a pittance to those with savings.   On second thoughts maybe it's the taxman (legalised robbery!) 

Sorry I am not explaining it well - It is not illegal for Insurance to be part of the loan, that is a sensible thing to do (insure your loan against unforseen circumstances). What is illegal is for the finance company to make it a condition of you getting the loan (which is what used to happen in real life). The customer must have total freedom of choice when deciding to insure the loan or not.

The problem is that is can bump up the premiums by a fair bit so a lot of borrowers do not take it and then if something does go wrong they are up the creek without a paddle.

BTW - there are plenty people out there that can pay but wont, unfortunately that is the way society is now. If you can get away with it then go for it is the attitude a lot take now.

Sorry I am not explaining it well - It is not illegal for Insurance to be part of the loan, that is a sensible thing to do (insure your loan against unforseen circumstances). What is illegal is for the finance company to make it a condition of you getting the loan (which is what used to happen in real life). The customer must have total freedom of choice when deciding to insure the loan or not.

The problem is that is can bump up the premiums by a fair bit so a lot of borrowers do not take it and then if something does go wrong they are up the creek without a paddle.

No apologies necessary I got the gist the first time and I know all about loans because I've taken quite a few out over the years (always paid back as well btw).

BTW - there are plenty people out there that can pay but wont, unfortunately that is the way society is now. If you can get away with it then go for it is the attitude a lot take now.

And apparently a number of those who can pay but won't are those who don't even need to take out credit because they are the highest earners who make use of the various loopholes to avoid paying tax.

 

 

There Is No Gold In The Vault

Of

The Bank of England,

The Chancellor Is Out To Lunch

 

Credit Where Credit Is Due,

Credit For,

The Credit Munch

 

 

CREDIT LUNCH

CREDIT MUNCH

CREDIT BUNCH

CREDIT CRUNCH

 

 

<INIT>M8*

SUPERSIZE THOSE SUCKERS

We're feeling the effect of the credit crunch a little, particularly with petrol, and grocery shopping,but thankfully i survived the last recession, and learned how to budget.

It's not going to be easy, but we'll get through it 

 

YOU WILL EMERGE LEANER BUT FITTER

 FITTER AND POORER

 LESS WELL OFF

 ON YOUR UPPERS

A NATION LED BY HOPE

As Your Pleader Said In Manchester

I'm not being affected at the moment, but maybe over the next months we will see the true damage! I am quite confused about the whole thing at the moment, it's not that easy to know exactly what's going on!! I've done a bit of research online and found some interesting sites which have helped to make things more clear. There are lots of articles on the current situation such as this one from The Guardian and this one from The Times Online.

There are also lots of sites with free advice such as this one on credit and debit cards, mortgages and loans and this site with helpful info on mortgage and financial advice.

Hope this information helps!

No I am working and have a tracker mortgage so the last year has been fantastic for me. Lower mortgage and cheaper food/petrol. It's great, only wish I had opened a euro or dollar account last year. As for the bigger picture it is really grim news for the Country and although so far I am uneffected (even benefiting from the downturn) this may not last, and for anyone who bought their property in 2007 well I am very sorry for them. I knew nothing about how the credit crunch happened, but I came across a really useful site which explains it very clearly. It's not written by an economist which is good! Look at www.johnabbey.co.uk Not sure how accurate it all is but I think its pretty close from other artcles I have read.

Gordon Brown and his Cabinet should get out in the real world. What is the point in providing more money for lending and the car industry when so many people are being made redundant. The industry is in such a mess because people donot have the money to spend with redundancy and ever increasing prices on food,fuel,transport , Gas,Electric,Water and rates not everyones money is going up as Gordon Brown and his Cabinet plus Advisers seem to think  .I know quite a number of people my own family members included all on fixed income who are having to cut down on food and heating because the direct debits for gas, water,electric,rates and mortgage plus other essentionals are more than their wages going into the bank because of the never ending price increases never mind any left over for food,clothes and essential repairs to the home. The Banks have been putting interest rates down for savers for the past year yet at the same time either not passing on interest cuts for mortgages or increasing interest rates,yet if the telegraph is to be believed The RBS just scrapped a debt of over 2million pounds for one of its affluent customers he was not even English or Scottish though I belief if I remember correctly lived in this Counrty it seems their answer is forget what the rich owe but go after the poor who only owe a few hundred or thousand with this government the rich get richer including members of the goverment but the poor get poorer the companys putting up their prices whilst making large profits and the goverment is doing nothing to stop it. The first bank to be nationalised has already paid back a good amount of the money borrowed plus given all staff a bonus yet are the biggest lender to repossess homes sometimes when only a few payments have been missed Gordon Brown and his Government really donot know or perhaps its they donot care what is happening in the real world as long as he seems to be doing something and making himself and labour look good. It seems to me that almost everytime this country has got into a finacial mess and a large amount of debt that will take the taxpayers years to pay off a Labour Government has been in power. The before 6.0am BBC World News seem to be the only ones who are reporting the real finacial situation on what is going off in the world and this country.   Patricia East Midlands

solutions4finance:

I work as a business asset finance broker, and I have to admit that the crunch is certainly crunching harder than ever.

I also don't think that media "scare-mongering" does us any good what-so-ever. If people are told that there is no money, general suggestability and paranoia will, and does, have an adverse effect on public spending. Yes, the country is experiencing a financial shift, but surely the media have a  social and economic responsibility to report the facts without the need for injecting the sensationalism that leads to mass hysteria, which in this instance results in reduced public spending?

 

I agree that the scare mongering doesn't do any good, if you look at the FTSE price it goes up everyday that the credit crunch is not the main story in the news for example last week when the main headlines were about the Man in Austria who raped his daughter and kept her in the basement the FTSE grew.

The news reports seem to be bending the truth a lot too.  Take for example with ITVplc, they kept going on about how ITV was loosing money when really it is because they spent tens of millions of pounds buying companies, they still have a turnover of over £2bn, there was a difference of arround £50million but ITVplc spent more than that on wholly buying and buying stakes in various companies last year.

In the past few weeks the FTSE 100 has gone up, it is arround the same price as it was in 1998.  The FTSE 100 was lower in march 2003 than it has been anytime in the past 10 years

Of course if news reports keep saying how banks are losing money people are going to withdraw all their money and the government will have to buy more shares in the banks.  Also news reports seem to not mention the banks will buy the shares back from the government.  The government may be buying billions of pounds of shares but they will be worth more and sold for a higher price when the banks start making more money

I quite agree with you Rosiet the trouble in this country people have been encouraged to go into debt by people who have misused the power most of them have gained falsely. Some companies are carrying on normally but others are going out of business and causing unemployment. Do we need to bring into this country more workers.

I am certain this is no media myth, please allow me some of your space to give my experience with the credit crunch.

For several years I have worked for a large foreign company, the company has alway's boasted of its success, it always made a healthy profit margin although it has always needed the banks help with finance, this was never a problem as the bank always got a healthy return for its investment, But in November 2008 the bank was no longer able to supply the finance the company needed, basically the bank had no money to lend, even to a profitable business.

We at home had a great Christmass with our three young children, although I do not earn a great salary we always get through okay. January came cold as it was. One morning I got a nasty letter from my bank saying that my account was very overdrawn and could I rectify this as soon as possible. I knew December was an expensive month as it would be with three children but I do not usually go overdrawn especially for £700. I looked into this and found that my employer had not paid my salary, I had been going to work everyday and nothing had been said to me warning of this. When I pointed this out to my boss, he said that the wages department must have made a mistake, he then gave me a letter telling me that some staff would be made redundant and I could be one of them, obviously we were all devastated as we were a very profitable part of the company, fortunately for me I retained my employment but some of my friends did not. (They have still not been paid any redundacy money).

Since then, I have been paid late constantly and not the full amount of money due to me, I have been reminded everyday by my boss that I am lucky to have a job in these difficult days. Each day I wonder if it will be my last in a job that I have always loved. I know I have skills that many companies would pay a lot for. I had been offered by a competitor a lot of money they also offered a larger salary, but I am a very loyal person and believe in commitment, I know the grass is never greener on the other side.and decided to stay.

Two weeks ago I asked my boss if there would be any problem getting my salary on time as I was starting to have a few problems with some bills, a reasonable question I thought! He then said that there could be, and that if I did not like it I could Get another job, he has been affected by all this too, as the pressure on him has been enormous, I had always considered him a friend until all of this happened, and always worked hard for him. But now I question my values of Loyalty and commitment and hard work for long hours, was it all worth it?

My wife and I are in a bit of bother now financially, like many others out there. I know I have done the best I could for my family. As the man of the house I have seen it as my responsibility to provide for them, I now feel scared and frightened as does my wife, we are about to miss some payments on our bills, I feel I have failed them because I should have gone to another employer when I had the chance, it is not that I do not earn enough to pay these bills, I just have an employer reluctant or unable to pay me the salary that I earn. Even if I stay with my employer and work hard and earn the company lots of money, it does not matter, as the parent company empty the bank account on a regular basis. I know that I could lose everything now and it hurts me so much as I have not been able to do anything about it. My bank will not increase my overdraft, and I cannot blame them, money is their business and I am not a great investment for them at the moment.

Bearing my soul like this is a very humiliating experience for a very proud man like me, I do not know what to do, I am now searching for another job and I will find something, I am sure that things will get better eventually although it will probably get worse first. In the meantime I have three lovely little children that love me without conditions, that is what drives me at the moment. I know there must be many people out there in the same situation as us, powerless over the actions of others, please hang on in there you are not alone.

Is the Credit Crunch real? You ***bet it is, and it has not even hit hard yet.