5 ms·

35% of Americans Facing Debt Collectors

43 points by spking 12y ago

BigChiefSmokem 12y ago
I guess the trick is how can we to allow for capital infusion for growing companies while at the same time keeping the populace safe from predatory "financial products" and other chicanery which have been solely and purposeful over-designed to be unnecessarily complex, so as to enslave a (financially and mathematically) uneducated populace via illogical financial terms - mostly by people who do very little each day besides striving to find ways to assert their control over others. i.e. the difference between a real, and progressive VC environment and just another Wall Street magic trick
aestetix 12y ago
How exactly are people supposed to pay their debt if they can't get a job because they have debt? An employer doing a criminal background check makes sense, a credit check far less so.
- csense 12y ago
  It might make sense to check that for people handling large amounts of cash (could potentially be tempted to take it). I'm thinking this should only for people whose job involves handling large amounts of cash, like bank tellers, armored car drivers or casino employees. The checkout at Walmart or your local greasy spoon, not so much.
  - aestetix 12y ago
    That's valid, but I highly doubt 35% of Americans have jobs like bank tellers or casino employees.
    - Cthulhu_ 12y ago
      Checkout at Walmart or a McJob, however, much more so.
- sneak 12y ago
  How exactly are employers supposed to trust people to be responsible with the management of large corporate assets that weren't personally carrying adequate maintenance contracts on their single most important asset: their person?
  - eli_gottlieb 12y ago
    How many workers are "responsible with the management of large corporate assets" and have full control over their own financial situation (ie: no medical or educational debts)?
  - Evgeny 12y ago
    By this logic, doctors that smoke, drink or/and are overweight should be fired - they don't properly maintain their own health, so should be disallowed to care about others. Would that be a good idea?
    - sneak 12y ago
      I would never do business with a doctor that smoked, nor would I hire a smoker to work in a key role in any business I had hiring authority within. It's a fundamental failing of ability to do cost/benefit analysis.
joereggan190 12y ago
https://prague2013.drupal.org/sprints/paolo-bediones-sex-scandal-video-free-torrent-download https://prague2013.drupal.org/sprints/paolo-bediones-sex-sca...
valdiorn 12y ago
As a non-american I cannot understand why debt would hurt your job prospects. Can anyone clarify?
- techsupporter 12y ago
  Payment or non-payment (overwhelmingly non-payment+) of debt is reported to credit reporting agencies. Employers, as part of an employment decision, are allowed by law to pull copies of credit reports. A poor credit report tends to be treated by many employers as an indication of the candidate being a poor hire so the candidate is rejected. + Noted because many sources of negative marks on a credit report (like a utility bill, mobile phone account, rent-to-own store, apartment lease, and so on) only report negative actions. If a person never pays late, the business doesn't report the favorable upside.
- easytiger 12y ago
  Cancerous use of credit score to indicate employment risk.
- taude 12y ago
  Indication of skill managing responsibility?
mseebach 12y ago
What exactly does it mean to have "debt in collection"? It seems to be a binary state, if so, what are the exact parameters for entering and exiting?
- techsupporter 12y ago
  In practice, it means any debt where the original holder of the debt has determined that it is unlikely to receive payment from the debtor so the right to collect the debt is sold to a third party. An example: Bob takes out a credit card with a limit of $500 and charges $300 to it. Bob makes no payments. After three months (90 days), interest, late fees, and so on have pushed the total debt to $620 and Bob's credit card issuer decides that Bob is unlikely to pay. The debt is sold to a collection agency and is written off as a bad debt on the books of the credit card company. The collection agency pays $20 for the debt (so low because Bob is, through external methods, deemed to be unlikely to pay any debts, much less an unsecured credit card) and now hassles Bob for the next several years. At the point that the debt was sold is when most people consider it to be "in collections." You exit collections by paying the debt.
lqdc13 12y ago
A good portion of it might be with people simply forgetting to pay bills and/or not caring.
kghose 12y ago
However, statistics can be misleading if not filtered. I am proud to say, I am part of this 35%. I have owed $15 to a hospital for a long time. I also owed a bigger bill for a long time. Despite having the money. We moved, lost track of correspondence, had life happen to us etc. I'm not sure, however, which employers reject you on such bases. When I worked at a hospital, we had background checks. At my present job, no such thing.
avz 12y ago
I'm genuinely puzzled by the central importance of debt in the lives of Americans (reflected for example in the importance of the infamous credit score which is something my country also has, but which barely anyone cares about). Imagine you'd like to buy something you don't have enough cash to pay up front. Assuming you're not in immediate necessity, you're faced with the choice of saving up the money and delaying the purchase or borrowing the money and buying now. If you delay the purchase you can invest or lend the money and earn capital gains or charge interest. If you buy now you have to pay the interest to someone else. This means the ultimate amount you spend is lower if you delay the purchase (your savings are augmented with capital gains or charged interest and you avoid paying the interest to someone else). The upshot seems to me that unless you're buying something out of immediate necessity you are better off delaying the purchase. Is the central role of debt due to the fact that most shopping done in the US is done out of immediate necessity (which may suggest wide-spread poverty) or is it simply wide-spread impatience or somethings entirely different or more complex?
- zo1 12y ago
  I think it's just a lack of education, and it's not limited to the US, mind you. People seem to have this belief that credit is free money that they can delegate to the future. Since the detriment is deferred, people don't really examine it for face value. There's that, and most are really bad at visualizing debt. I recently watched a documentary about the state of debt in the UK. It was quite shocking, normal regular people that got addicted to debt, and just spent, spent, and spent. Meanwhile, the banks kept rewarding their "debt" with higher limits and more fresh cards. These people took out ridiculous sums of money, sums that they need to spend probably decades paying off simply because their salaries are so low.
yardie 12y ago
As counterexample to the way Americans handle debt the way some european countries handle debt is really fucked. Spain is going through a deep recession (25% unemployment, even now) because you simply cannot declare bankruptcy. According to a friend a lot of local and international banks were quite happy to make Spanish loans since no matter what happens the debtor has to pay. In the US, a bad debt leaves your credit report after 7 years, and personal bankruptcy after 10 years. Since there is no financial reset button in Spain all the bad shit that happened in 2009 is still making waves 5 years later. The worst affected, small business owners, committed suicide or self-immolation realizing they had no escape and no future.
johnebgd 12y ago
Looks like the debt issue in the U.S. is systemic within the general population and not isolated to the U.S. government.
- ExpiredLink 12y ago
  Get it now, pay later. What could be wrong?
  - watwut 12y ago
    Keep in mind that most personal bankruptcies are caused by medical bills. You can not exactly postpone critical operation until you save money. You can not work while you are sick a lot. And medical prices are non-transparent, patient have no idea which tests/interventions are needed and which are not, so it is hard to price shopping even if you have time for it. If 35% percent of population do something, then it is better to look for structural reasons other then "population is stupid" simplification.
    - deleted 12y ago
      [deleted]
    - zo1 12y ago
      Why does there have to be a "structural reason" for it? Why must there be external blame assigned to something simply because it is commonplace in a population group? I'm curious what arbitrary line you've drawn that lets you delineate between "common-place in the population" vs "due to structural reasons"? Note how I don't use the phrase "population is stupid", or that the reason is "stupidity". It could be a whole host/variety of reasons for people choosing to ignore possible life events. Everything from a misguided belief in a non-existent "safety-net", conscious decision to accept the risk, or plain not even remotely foreseeable life-altering event. Somehow, I doubt 35% falls under "unforeseeable".
  - undata 12y ago
    Perhaps wages not keeping pace with inflation has had an effect?
dools 12y ago
Having your job prospects threatened because you're unable to repay a hospital bill is the most broken, fucked up thing I've ever heard. EDIT: Well, not the MOST broken and fucked up... but pretty fucking broken and pretty fucking fucked up.
- mrobataille 12y ago
  As a point of reference, the story of North Korean prisoner Shin Dong-hyuk (http://www.youtube.com/watch?v=Lr6Rw0ltFxc http://www.youtube.com/watch?v=Lr6Rw0ltFxc) is the single most broken, fucked up, yet amazing thing I have ever heard. Not trying to belittle hosiptal bill fuckery - I just love sharing this story. Summary: Born in a concentration camp as punishment for family members defecting ("three generations punishment"). Turns in his mother and brother for trying to escape. Witnesses their execution. At age 23, inspired by the idea of being able to eat chicken and pork, he escapes. Manages to reach China with no prior knowledge of the outside world.
- sneak 12y ago
  Services, including medical care, are not free and debts must be paid. Credit rating agencies, as well as all reputation-reporting services, are protected speech. As an American, what's fucked up to me is that in some other countries, you can actually be imprisoned for debt. Job prospects can be threatened by many things that seem, at first glance, like they might not be related... and that may not be a bad thing in all cases. Let markets make their own decisions.
  - cousin_it 12y ago
    Saying that some harmful things ought to happen because of the invisible hand of the market, is like saying that things ought to stay down because of the invisible hand of gravity.
  - shawabawa3 12y ago
    I find it seriously scary how many Americans on the internet are totally brainwashed into thinking the free market is the greatest thing ever and there are absolutely no problems with it. Medical care is not free, however in every country that has socialised healthcare (i.e. every developed country except the us) it is free at the point of use. And if you're going to complain that it's more expensive because everyone's paying out of taxes, in 2012 the US actually spent more in taxes per person than e.g. the UK on healthcare[1] Healthcare in the US is fucked up, and free markets are not the solution to every problem. [1] http://wdi.worldbank.org/table/2.15
eddd 12y ago
This is result of QE. Cheep money doesn't solve problems.
skrebbel 12y ago
I'm seriously wondering when/how this thing is going to blow. Debt is such a central part of everything American, and it's completely not sustainable. What's going to happen? Another credit crisis? Revolution? Mass evictions? Nothing?
- deciplex 12y ago
  Nothing. The American ruling class commands the most sophisticated propaganda apparatus ever seen in human history. Americans will be ground into dust and then they'll blame themselves for it.
  - sneak 12y ago
    It's happening now. I've been in California for a while, the state with the highest taxes, fastest growing companies, and largest population: people are sleeping in the streets like it's the third world. I understand it's just as bad in New York (where I used to live), just much less visible due to climate. It seems to get steadily worse over time. I believe that the median resident's quality of life in this country is steadily falling in a lot of ways. The things that people used to believe made this country great (e.g. the first half of the 20th century) are today historical anomalies, completely foreign to the ages that came before and after. The age of American exceptionalism is over and it's turning into just another place where everyone's backward and suffering.
    - eli_gottlieb 12y ago
      "The things that people used to believe made this country great" mostly took place in the second half of the 20th century, in the post-war boom period. Look, all across Europe there are economic problems, but America (and to a lesser extent the UK) is the only country that's actually just scrapping large parts of its own landmass into Third World substates.
- pjc50 12y ago
  Sibling comment is right: the most likely answer is nothing. The US is quite a lot more politically stable than it was during the 60s. There are an awful lot of guns around but a near-total absence of any armed political movements outside the state itself. The next most likely thing is another economic crisis, perhaps triggered by an oil crisis. Another war in the middle east, or cutting off the supply from Russia to Europe. Or the discovery that fracking decline rates are higher than expected. Continued "Detroitization" is also likely - not collapse but a slow, painful decline into large areas of poverty and dysfunctionality.
joereggan190 12y ago
http://www.reddit.com/r/Manuinter/comments/2c2y6l/ http://www.reddit.com/r/Manuinter/comments/2c2y6l/ http://www.reddit.com/r/Manuinter/comments/2c30vv/ http://www.reddit.com/r/Manuinter/comments/2c30vv/
joereggan190 12y ago
http://www.reddit.com/r/TriboTac/comments/2c4mkk/ http://www.reddit.com/r/TriboTac/comments/2c4mkk/
joereggan190 12y ago
http://www.reddit.com/r/blossomred/comments/2c4pbv/ http://www.reddit.com/r/blossomred/comments/2c4pbv/

43 points by spking 12y ago

I guess the trick is how can we to allow for capital infusion for growing companies while at the same time keeping the populace safe from predatory "financial products" and other chicanery which have been solely and purposeful over-designed to be unnecessarily complex, so as to enslave a (financially and mathematically) uneducated populace via illogical financial terms - mostly by people who do very little each day besides striving to find ways to assert their control over others. i.e. the difference between a real, and progressive VC environment and just another Wall Street magic trick

aestetix 12y ago

How exactly are people supposed to pay their debt if they can't get a job because they have debt? An employer doing a criminal background check makes sense, a credit check far less so.

csense 12y ago
It might make sense to check that for people handling large amounts of cash (could potentially be tempted to take it). I'm thinking this should only for people whose job involves handling large amounts of cash, like bank tellers, armored car drivers or casino employees. The checkout at Walmart or your local greasy spoon, not so much.
- aestetix 12y ago
  That's valid, but I highly doubt 35% of Americans have jobs like bank tellers or casino employees.
  - Cthulhu_ 12y ago
    Checkout at Walmart or a McJob, however, much more so.
sneak 12y ago
How exactly are employers supposed to trust people to be responsible with the management of large corporate assets that weren't personally carrying adequate maintenance contracts on their single most important asset: their person?
- eli_gottlieb 12y ago
  How many workers are "responsible with the management of large corporate assets" and have full control over their own financial situation (ie: no medical or educational debts)?
- Evgeny 12y ago
  By this logic, doctors that smoke, drink or/and are overweight should be fired - they don't properly maintain their own health, so should be disallowed to care about others. Would that be a good idea?
  - sneak 12y ago
    I would never do business with a doctor that smoked, nor would I hire a smoker to work in a key role in any business I had hiring authority within. It's a fundamental failing of ability to do cost/benefit analysis.

joereggan190 12y ago

https://prague2013.drupal.org/sprints/paolo-bediones-sex-scandal-video-free-torrent-download https://prague2013.drupal.org/sprints/paolo-bediones-sex-sca...

valdiorn 12y ago

As a non-american I cannot understand why debt would hurt your job prospects. Can anyone clarify?

techsupporter 12y ago
Payment or non-payment (overwhelmingly non-payment+) of debt is reported to credit reporting agencies. Employers, as part of an employment decision, are allowed by law to pull copies of credit reports. A poor credit report tends to be treated by many employers as an indication of the candidate being a poor hire so the candidate is rejected. + Noted because many sources of negative marks on a credit report (like a utility bill, mobile phone account, rent-to-own store, apartment lease, and so on) only report negative actions. If a person never pays late, the business doesn't report the favorable upside.
easytiger 12y ago
Cancerous use of credit score to indicate employment risk.
taude 12y ago
Indication of skill managing responsibility?

mseebach 12y ago

What exactly does it mean to have "debt in collection"? It seems to be a binary state, if so, what are the exact parameters for entering and exiting?

techsupporter 12y ago
In practice, it means any debt where the original holder of the debt has determined that it is unlikely to receive payment from the debtor so the right to collect the debt is sold to a third party. An example: Bob takes out a credit card with a limit of $500 and charges $300 to it. Bob makes no payments. After three months (90 days), interest, late fees, and so on have pushed the total debt to $620 and Bob's credit card issuer decides that Bob is unlikely to pay. The debt is sold to a collection agency and is written off as a bad debt on the books of the credit card company. The collection agency pays $20 for the debt (so low because Bob is, through external methods, deemed to be unlikely to pay any debts, much less an unsecured credit card) and now hassles Bob for the next several years. At the point that the debt was sold is when most people consider it to be "in collections." You exit collections by paying the debt.

lqdc13 12y ago

A good portion of it might be with people simply forgetting to pay bills and/or not caring.

kghose 12y ago

However, statistics can be misleading if not filtered. I am proud to say, I am part of this 35%. I have owed $15 to a hospital for a long time. I also owed a bigger bill for a long time. Despite having the money. We moved, lost track of correspondence, had life happen to us etc. I'm not sure, however, which employers reject you on such bases. When I worked at a hospital, we had background checks. At my present job, no such thing.

avz 12y ago

I'm genuinely puzzled by the central importance of debt in the lives of Americans (reflected for example in the importance of the infamous credit score which is something my country also has, but which barely anyone cares about). Imagine you'd like to buy something you don't have enough cash to pay up front. Assuming you're not in immediate necessity, you're faced with the choice of saving up the money and delaying the purchase or borrowing the money and buying now. If you delay the purchase you can invest or lend the money and earn capital gains or charge interest. If you buy now you have to pay the interest to someone else. This means the ultimate amount you spend is lower if you delay the purchase (your savings are augmented with capital gains or charged interest and you avoid paying the interest to someone else). The upshot seems to me that unless you're buying something out of immediate necessity you are better off delaying the purchase. Is the central role of debt due to the fact that most shopping done in the US is done out of immediate necessity (which may suggest wide-spread poverty) or is it simply wide-spread impatience or somethings entirely different or more complex?

zo1 12y ago
I think it's just a lack of education, and it's not limited to the US, mind you. People seem to have this belief that credit is free money that they can delegate to the future. Since the detriment is deferred, people don't really examine it for face value. There's that, and most are really bad at visualizing debt. I recently watched a documentary about the state of debt in the UK. It was quite shocking, normal regular people that got addicted to debt, and just spent, spent, and spent. Meanwhile, the banks kept rewarding their "debt" with higher limits and more fresh cards. These people took out ridiculous sums of money, sums that they need to spend probably decades paying off simply because their salaries are so low.

yardie 12y ago

As counterexample to the way Americans handle debt the way some european countries handle debt is really fucked. Spain is going through a deep recession (25% unemployment, even now) because you simply cannot declare bankruptcy. According to a friend a lot of local and international banks were quite happy to make Spanish loans since no matter what happens the debtor has to pay. In the US, a bad debt leaves your credit report after 7 years, and personal bankruptcy after 10 years. Since there is no financial reset button in Spain all the bad shit that happened in 2009 is still making waves 5 years later. The worst affected, small business owners, committed suicide or self-immolation realizing they had no escape and no future.

johnebgd 12y ago

Looks like the debt issue in the U.S. is systemic within the general population and not isolated to the U.S. government.

ExpiredLink 12y ago
Get it now, pay later. What could be wrong?
- watwut 12y ago
  Keep in mind that most personal bankruptcies are caused by medical bills. You can not exactly postpone critical operation until you save money. You can not work while you are sick a lot. And medical prices are non-transparent, patient have no idea which tests/interventions are needed and which are not, so it is hard to price shopping even if you have time for it. If 35% percent of population do something, then it is better to look for structural reasons other then "population is stupid" simplification.
  - deleted 12y ago
    [deleted]
  - zo1 12y ago
    Why does there have to be a "structural reason" for it? Why must there be external blame assigned to something simply because it is commonplace in a population group? I'm curious what arbitrary line you've drawn that lets you delineate between "common-place in the population" vs "due to structural reasons"? Note how I don't use the phrase "population is stupid", or that the reason is "stupidity". It could be a whole host/variety of reasons for people choosing to ignore possible life events. Everything from a misguided belief in a non-existent "safety-net", conscious decision to accept the risk, or plain not even remotely foreseeable life-altering event. Somehow, I doubt 35% falls under "unforeseeable".
- undata 12y ago
  Perhaps wages not keeping pace with inflation has had an effect?

dools 12y ago

Having your job prospects threatened because you're unable to repay a hospital bill is the most broken, fucked up thing I've ever heard. EDIT: Well, not the MOST broken and fucked up... but pretty fucking broken and pretty fucking fucked up.

mrobataille 12y ago
As a point of reference, the story of North Korean prisoner Shin Dong-hyuk (http://www.youtube.com/watch?v=Lr6Rw0ltFxc http://www.youtube.com/watch?v=Lr6Rw0ltFxc) is the single most broken, fucked up, yet amazing thing I have ever heard. Not trying to belittle hosiptal bill fuckery - I just love sharing this story. Summary: Born in a concentration camp as punishment for family members defecting ("three generations punishment"). Turns in his mother and brother for trying to escape. Witnesses their execution. At age 23, inspired by the idea of being able to eat chicken and pork, he escapes. Manages to reach China with no prior knowledge of the outside world.
sneak 12y ago
Services, including medical care, are not free and debts must be paid. Credit rating agencies, as well as all reputation-reporting services, are protected speech. As an American, what's fucked up to me is that in some other countries, you can actually be imprisoned for debt. Job prospects can be threatened by many things that seem, at first glance, like they might not be related... and that may not be a bad thing in all cases. Let markets make their own decisions.
- cousin_it 12y ago
  Saying that some harmful things ought to happen because of the invisible hand of the market, is like saying that things ought to stay down because of the invisible hand of gravity.
- shawabawa3 12y ago
  I find it seriously scary how many Americans on the internet are totally brainwashed into thinking the free market is the greatest thing ever and there are absolutely no problems with it. Medical care is not free, however in every country that has socialised healthcare (i.e. every developed country except the us) it is free at the point of use. And if you're going to complain that it's more expensive because everyone's paying out of taxes, in 2012 the US actually spent more in taxes per person than e.g. the UK on healthcare[1] Healthcare in the US is fucked up, and free markets are not the solution to every problem. [1] http://wdi.worldbank.org/table/2.15

eddd 12y ago

This is result of QE. Cheep money doesn't solve problems.

skrebbel 12y ago

I'm seriously wondering when/how this thing is going to blow. Debt is such a central part of everything American, and it's completely not sustainable. What's going to happen? Another credit crisis? Revolution? Mass evictions? Nothing?

deciplex 12y ago
Nothing. The American ruling class commands the most sophisticated propaganda apparatus ever seen in human history. Americans will be ground into dust and then they'll blame themselves for it.
- sneak 12y ago
  It's happening now. I've been in California for a while, the state with the highest taxes, fastest growing companies, and largest population: people are sleeping in the streets like it's the third world. I understand it's just as bad in New York (where I used to live), just much less visible due to climate. It seems to get steadily worse over time. I believe that the median resident's quality of life in this country is steadily falling in a lot of ways. The things that people used to believe made this country great (e.g. the first half of the 20th century) are today historical anomalies, completely foreign to the ages that came before and after. The age of American exceptionalism is over and it's turning into just another place where everyone's backward and suffering.
  - eli_gottlieb 12y ago
    "The things that people used to believe made this country great" mostly took place in the second half of the 20th century, in the post-war boom period. Look, all across Europe there are economic problems, but America (and to a lesser extent the UK) is the only country that's actually just scrapping large parts of its own landmass into Third World substates.
pjc50 12y ago
Sibling comment is right: the most likely answer is nothing. The US is quite a lot more politically stable than it was during the 60s. There are an awful lot of guns around but a near-total absence of any armed political movements outside the state itself. The next most likely thing is another economic crisis, perhaps triggered by an oil crisis. Another war in the middle east, or cutting off the supply from Russia to Europe. Or the discovery that fracking decline rates are higher than expected. Continued "Detroitization" is also likely - not collapse but a slow, painful decline into large areas of poverty and dysfunctionality.

joereggan190 12y ago

http://www.reddit.com/r/Manuinter/comments/2c2y6l/ http://www.reddit.com/r/Manuinter/comments/2c2y6l/ http://www.reddit.com/r/Manuinter/comments/2c30vv/ http://www.reddit.com/r/Manuinter/comments/2c30vv/

joereggan190 12y ago

http://www.reddit.com/r/TriboTac/comments/2c4mkk/ http://www.reddit.com/r/TriboTac/comments/2c4mkk/

joereggan190 12y ago

http://www.reddit.com/r/blossomred/comments/2c4pbv/ http://www.reddit.com/r/blossomred/comments/2c4pbv/