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No reputable loan would have this kind of clause, and no one should ever even consider signing such a thing. It’s a testament to the miserable state of financi
by zaroth 8y ago
No reputable loan would have this kind of clause, and no one should ever even consider signing such a thing.
It’s a testament to the miserable state of financial education, poor regulation, and even a corrupt legal system that is willing to even entertain such a document.
Allowing a document like this in court is like letting desperate people sell their organs for cash. It stinks to high heavens, and it seems obvious there’s plenty of fraud at Yellowstone for a decent honorable DA to bring down a hammer on these guys. But will they? Don’t hold your breath.
- kryogen1c 8y agoIANAL, but this seems pretty vulnerable to countersuit. If you have the terms of your loan and proof you paid, it doesn't matter if you sign a confession of guilt. Practically speaking, it's still not possible for most people to defend. Lawyers cost money, and you're trying to sue who just took all yours.
- ajhurliman 8y agoAdditionally, your money-starved business will probably have folded in the meantime.
- TAForObvReasons 8y agoIt's a testament to a corrupt legal system and poor regulation, that's for sure. It's a predatory practice and no doubt brings revenue to Orange County NY and other places. However this isn't really about financial education. For many people, if there's even a slim hope of a business succeeding, the fees and risks associated with an absurd loan are preferable to being forced to close the business. The anecdotes are almost always of the form "we just needed a small liferaft until business picks up. Once business is good, we can pay it off." That's human nature to an extent.
- toyg 8y agoAnd there are plenty of war stories in “business success” books where $founder leveraged his credit cards and mortgages to the hilt, before the wave broke to make him a billionaire. They curiously tend to avoid mentioning that, 9 times out of 10, that sort of behaviour ends up in bankruptcy and tears.
- ipython 8y agoReputable loans from well-known banks absolutely contain this kind of clause. Source: I've signed one myself (business Line of Credit).
- gowld 8y agoIt's nothing about "financial education", it's about an artificial right being created by a dysfunctional government and granted to thieves. Common law prohibits "unconscionable contracts", and this is surely one.
- JimboOmega 8y agoWe live in a world where arbitration clauses are expected, so what does that tell you? They start as one entity's predatory practice, but when they work in court, they spread rapidly and become a standard that you simply have to deal with. Edit: This is also a world where student date can never be discharged because that's what the lenders wanted and they wrote the law.
- metildaa 8y agoLike Personal Guarantees for getting a Merchant Account to accept credit cards. Everyone but Stripe, Square & PayPal requires them.
- BallinBige 8y agois that correct? links?
- mjevans 8y agoI looked in to this in general a couple years ago. At least that that time the lending agencies that were NOT banks and actually HAD public statements as to the terms/conditions being offered __ALL__ included that. You might just not see them in Stripe/PayPal worded as such, but the liability is pushed entirely on the seller. This is where a contractual fulfillment tracking system would be useful, a matter of public record as to whom is paying whom and if the other side(s) in the transaction held up their end of the deal. The sort of thing that witnesses would sign; like your bank, their bank, and regulatory organizations (for some special or large value transactions).
- deleted 8y ago[deleted]