Debt Collectors Are Bankrupting Australians over Small Credit Card Debts

https://www.abc.net.au/news/2019-08-13/debt-collectors-suing...

So.

  1. Living off the public purse (public housing).

  2. Has more children than they could (ever) afford (5 kids).

  3. Buys things they can't afford (a bed and a washing machine using a credit card).

  4. Buys more things they can't afford (car financed too).

  5. Stops paying what they owe despite being able to (repaid debt when forced).

  6. Complains about having to repay what they borrowed and owe.

Typical.

Lessons? Exercise financial responsibility. Don't be like these people.

Comments

  • +44 votes

    Yeah. Point 2 is the worst.

    • +11 votes

      Can't afford protection!

      • +15 votes

        Definitely can't afford kids.

        • +12 votes

          Have you seen the price of kids nowadays? Shiiiieeet. Forget about the upper market European ones, even the Asian ones are expensive!

          • +1 vote

            @Munki: Oh come on - you can get a well maintained secondhand one for quite reasonable money on Gumtree. No doubt there are plenty of oil rig workers happy to pay by Paypal if you mail the kid to them …

      • +7 votes

        Probably purchased the144 Willy gumboots deal last time and still working out where the kids are coming from. Dudes they expiry dates not lotto numbers!

      • -1 vote

        Pull out early???

      •  

        There is more money in govt child allowances, so thy make money when having kids, they just probably cheap out on the kids (food, education, toys, outings etc) It gives them the idea they have more money than they do and then keep buying sh!t they can't afford.
        Baby bonus was a great example of that, where shops like HN & JB were advertising packs for their $900 which was a TV and xbox or PS etc.

        • +2 votes

          My brother in law used to be a bank manager in Melbourne. His favourite story is of a New Zealand family that applied for, and received, approval for a mortgage based on income comprised entirely of welfare payments. There is money in government allowances for large families.

          • +7 votes

            @Some Guy: Contrary to popular belief among Australians, kiwis aren't eligible for the dole. Sounds like a nice BBQ story tho.

          • +1 vote

            @Some Guy: Yeah I had a work mate that boasted how lucky is her wife, stay at home with their 5 kids (maybe more) but earn almost the same as his office job salary. Those all our tax money damnnnnnnnn but i didn't say that…

    • +11 votes

      I thought point 5 was the worst. Seems a lot of people get into bankruptcy or significant crippling debt simply because they refuse to adjust their lifestyle to reflect their income.

      It's pretty clear that the people in this article match this description as they were able to afford to pay their debt when confronted with bankruptcy / losing their house.

      While the article tries to make the reader feel sorry for them, there is no sympathy from me and if anything, makes me angry at the entitled attitude people have.

  • +12 votes

    There is a bit more in the article than the 'highlights' you have listed.

    Whilst I support your call to "…Exercise financial responsibility…", there are a lot of people that could easily slip into this position.

    I'm just amazed that people would want to be in the news like this.

    • +9 votes

      there are a lot of people that could easily slip into this position.

      True, but this particular couple's situation seems entirely self-inflicted. As ChiMot points out, the worst part being that they decided to have FIVE kids while living in public housing (i.e. when they already couldn't financially support themselves).

      And they're not complaining about debts for say, medical procedures or other necessary spending, they're being forced to pay back what they borrowed for consumer spending. And the crazy thing is there will be people - including the ABC - which apparently sees nothing wrong about racking up debt, refusing to repay it, and then complaining about that being unfair.

      • +33 votes

        They did have five kids while living in public housing, and they also appear to have had two incomes at that time.
        Their business collapsed.
        They managed to get a mortgage to buy their own house ~10 years ago.
        Five years ago, they used an interest-free credit card, but didn't pay it off before the interest-free period expired.
        The debt (originally for a bed and washing machine) has apparently ballooned out to be ~$9,600
        She was injured and forced to cease working.

        I'm not defending their position. I'm providing more information (which is all stated within the article).

        They must have been in a reasonable financial position at the time of getting a mortgage (even with 5 kids).

        • -21 votes

          True, but it means they still decided to have five kids without even being able to support themselves, and while they seem to have been able to afford their mortgage (which is fine) - they evidently weren't able to afford their discretionary consumer spending.

          I mean - we criticize people who drive without insurance - there is no difference between that and not saving up or having insurance to deal with life's ups and downs.

          • +25 votes

            @HighAndDry: I'm not sure that a bed and a washing machine are discretionary consumer spending, but we don't know all the details, only those that have been reported.

            BTW, I didn't downvote your comments, but probably won't continue this discussion.

            • -10 votes

              @GG57:

              I'm not sure that a bed and a washing machine are discretionary consumer spending

              I'm certain they could have found cheaper options or more financially responsible ones than putting it on a credit card they couldn't repay. Lay-by still exists.

              And it's not harmless or victimless. Everyone else ends up paying for their mistakes in retailers and lenders charging higher rates as a margin to cover for these losses. You and I are paying for their financial irresponsibility.

              • +8 votes

                @HighAndDry: Actually, we're paying for the retailers and lenders financial irresponsibility. As you pointed out, it is pretty obvious these guys shouldn't have been given credit.

                •  

                  @mullsie:

                  Actually, we're paying for the retailers and lenders financial irresponsibility. As you pointed out, it is pretty obvious these guys shouldn't have been given credit.

                  I still don't understand this logic of:

                  "When someone borrows money and doesn't repay it, it's the lender's fault."

                  But no - the retails and lenders are covering themselves precisely by adjusting their prices and rates accordingly, and using debt collectors. Their interests are covered - which is why we're paying more.

                  • +4 votes

                    @HighAndDry: It would be nice if it worked that way, but it doesn't anymore.

                    It is in retailers/lenders best interests to extend credit to people who can’t afford it.

                    Retailers are paid upfront and don't care about their customers long term financial health.

                    Lenders only make money on late fees and charges - and you'll find that is all of them.

                    •  

                      @mullsie: All retailers make money by selling stuff, whether or not the customer can afford it. But no one is forcing anyone to buy, or to borrow.

                      • +5 votes

                        @HighAndDry: Do you at least understand Credit Cards, Afterpay, Flexirent only make money when people screw up?

                        •  

                          @mullsie: No. Credit cards can be used for emergency expenses, and can be repaid regularly and with a plan even outside the interest-free period. Afterpay makes money even with on-time repayments because they charge fees on businesses to use it. Flexirent charges fees for leasing consumer electronics and other goods - and honestly if you're using Flexirent you've already screwed up (because lay-by, still, exists).

                          • +2 votes

                            @HighAndDry: So you don't understand.

                          • +3 votes

                            @HighAndDry: Sorry for being rude but I can't understand your view of the world. There are vulnerable people who fall for easy money and are exploited* for decades.

                            *repaying $1000s for a xbox/fridge etc

                            • +9 votes

                              @mullsie: We have different expectations for adults. I believe that adults are responsible for their financial decisions and for meeting obligations which they agree to. You… don't.

                              There's nothing "exploitative" about someone deciding to borrow money at a rate they agree to, unless they suffer from some mental or intellectual disability. I don't assume adults are intellectually disabled.

                              • +8 votes

                                @HighAndDry: If all adults were responsible and made good choices, we could scrap ever single law and rely on good judgment.

                                • +3 votes

                                  @mullsie: Laws are what make adults responsible for the consequences of their actions - in this case, contract law regarding paying what you owe, and being able to be sued to repay what you owe.

                                  Which is my point - I know not all adults are responsible. But they should be, they are expected to be, and they should be held responsible.

                    •  

                      @mullsie: You appear to have no clue. The truth is the opposite of everything you state. There is an increasing amount of regulation on lenders that they cannot charge any more than their costs when loans go bad. Make money only on the bad debts? Where do you get these ideas from?

                      •  

                        @sclyde2: @sclyde2 It is a very broad subject. People who live pay to pay are serial "late payers" and AfterPay for example, makes 25% of its money from late fees.

                        Obviously people who simply don't pay are a different story…..

                •  

                  @mullsie: Actually they should of.

                  They actually had two incomes, the banks do take into account cost of children.

                  Should they have insurance, etc, yes in hindsight.

                  IF they qualify for it, why should they be prevented from having a home to live in? Because 1/100 might get into trouble?

            • +4 votes

              @GG57: Sure but second hand mattress ~$40, washing machine ~$250

      • +12 votes

        Do you really think that being injured and unable to work is self inflicted? Not saying they didn't make some mistakes but I think you're wildly misrepresenting what happened, especially as their issues with finances happened after raising their kids according to my reading of the article.

        Sometimes bad things happen and it's nobodies fault, as you may yet discover one day from your own experiences.

        • +2 votes

          Do you really think that being injured and unable to work is self inflicted?

          Not having any savings, insurance, and credit card debt that you haven't repaid and can't repay without both people working is self-inflicted.

          Let's not kid ourselves that being financially responsible is the same thing as being lucky.

          Sometimes bad things happen and it's nobodies fault

          True, sometimes. But not in this case, since even you admit:

          Not saying they didn't make some mistakes

          • +9 votes

            @HighAndDry: It must be nice to only see the world in black and white. So much simpler…

            • +6 votes

              @zoob: Never said it's black and white, just that in a lot of cases, the shades of grey don't matter. As an adult, the buck stops with you.

              We like talking about accountability when we talk about government, companies, the police, etc. Maybe we should start looking in the mirror first.

              • +4 votes

                @HighAndDry: @HighAndDry The problem with people like you is you are completely black and white to the point of immorality but you'll never admit it or change your mind about anything because you'll keep screaming some logic of yours. Lots of things have multiple answers, one's a fair answer and another is a better answer. People like you stick to the fair answer and that's it, you don' t wanna hear anything else because you simply don't care.

                If you've ever watched the show Suits, you're basically Louis Lit. Always brining up some law, always bringing up some rules. The people in this article are definitely bad at managing money and only they know why the hell they have 5 kids (big mistake), but after all this whats the solution? Is the solution to scream the laws in their faces until they either sell every single thing they own and go live on the streets or commit suicide? Because thats basically their options at this point. The problem with lending companies especially big banks is that they make a lot of their money exactly this way. Interest charges, fees, binding contracts that manipulate situations etc. Its legal to do so, but is it moral after a certain point? Thats where the debate comes in.

                An interesting story comes to mind where a predatory billionaire has been convicted in court for 17 years in prison and fined $1.26 billion for "fast cash loans". The business was legal but completely immoral. OP, your ideology sounds similar to that guy.
                https://www.youtube.com/watch?v=sk8_vVKPvus

                • +3 votes

                  @alikazi:

                  Is the solution to scream the laws in their faces until they either sell every single thing they own and go live on the streets or commit suicide? Because thats basically their options at this point.

                  Did you read the article? They were able to repay the debts because they did repay the debts - no "selling everything" or "living on the streets" needed.

                  The family borrowed the money from a peer-to-peer loan provider to clear their debt and last week the court matter was dropped.

                  I understand it might be hard to read from all the way up there on your high horse though.

                  Edit:

                  An interesting story comes to mind where a predatory billionaire has been convicted in court for 17 years in prison and fined $1.26 billion for "fast cash loans". The business was legal

                  I'd rather hope that the business was illegal if he was convicted, jailed and fined.

                  • +8 votes

                    @HighAndDry: If they did repay then why have you made this post? What is your point? I think its clear your point is to showcase your "Holier than thou" attitude. Have you got so much time on your hands that you have nothing better to do than to bring up some people in debt and then go on about how they are shitty people? This is exactly what someone on "their high horse" sounds like. So check your mirror.

                    • +6 votes

                      @alikazi:

                      If they did repay then why have you made this post? What is your point?

                      My point is that they're complaining it's "unfair" they were forced to repay what they owed - there's nothing unfair about it. They borrowed money, they agreed to pay interest, they failed to live up to their end of the deal.

                      • +1 vote

                        @HighAndDry: Yup yup yup. Law, rules, regulations. Thats it. Thats the only thing in your mind and you're right and everyone else is wrong. My point exactly.

                        • +6 votes

                          @alikazi:

                          Yup yup yup. Law, rules, regulations. Thats it.

                          I don't need the law to tell me that repaying what you owe, and keeping your promises, is the right thing to do.

                          •  

                            @HighAndDry: Mate, by replying me with your logic you're further enforcing my first comment. I suggest you stop now. I've got work to do and I've said what I needed to. See ya!

                          • +1 vote

                            @HighAndDry:

                            repaying what you owe, and keeping your promises, is the right thing to do.

                            Seriously? Look around!

                            So large corporations should not borrow billions in case they have a bond default? Because they do have Chapter 11 (US) for defaults.
                            And let me know how does the CEO keep those promises? by guaranteeing it personally?

                            I don't even get why the post was made… its like you want an award because paying your CC or mortgage "is the right thing to do".

                            It is completely irrelevant what your moral standpoint is or whether you pay because "its the right thing to do". The system assumes there are no morals.
                            If you don't pay, then the bank recovers assets. And might bankrupt you. You don't want them to sell your assets or bankrupt you? Pay them.
                            Morals have no bearing on it.

                            What about the morals of CBA bankrupting farmers who were ahead on mortgage repayments? Is that moral?
                            Did it matter? Because the CBA went right ahead and bankrupted them anyway.

                            I guess The faceless system run by the largest corporations in Australia and the world (bond sales, etc), making massive profits, backed by the Australian Government, thanks you ???????

                            •  

                              @IHatePeople:

                              So large corporations should not borrow billions in case they have a bond default? Because they do have Chapter 11

                              Chapter 11 is bankruptcy!. Wait, what are you objecting to, if your argument is just "But companies can just file for bankruptcy"? You should be supporting the debt collector for helping the couple do the same, using this logic.

                              What about the morals of CBA bankrupting farmers who were ahead on mortgage repayments? Is that moral?

                              This has literally never happened.

                  • +2 votes

                    @HighAndDry: You edited the answer after my reply. But your final point is exactly my point about you!
                    "I'd rather hope that the business was illegal if he was convicted, jailed and fined."
                    That sentence right there is the essence of your post right here. You confirmed my comment by saying that.

                  • +1 vote

                    @HighAndDry: Your D&D alignment is Lawful Evil.

                • +1 vote

                  @alikazi: Don't have time to watch the vid but someone went to jail for being immoral?

                • +3 votes

                  @alikazi: Amazing how she could suddenly start to pay $50 a week when threatened with bankruptcy isn't it… Almost like they just hoped the debt would go away if they ignored it, and spent the money on other things.

                  • +1 vote

                    @brendanm: exactly,

                    they were able to borrow money off family and friends and other lenders

                    so they chose to prioritise,

                    as many have said, it sounds like they were hoping it would just go away and when they realised it wasnt, they called the media

        • +4 votes

          Not having sufficient savings, Income Protection insurance and having a rainy day fund is self inflicted.

          People in Australia are so pampered.

          Try living in many other countries (exclude Western Europe), and you’ll find that society and the government isn’t going to help protect you with consumer rights, ombudsman’s, financial aid, debt helpline, unemployment benefits, the dole, and all these handouts.

          You had very well made sure you were self sufficient and self reliant. You make sure you have excellent relationships with your family members and relatives in case anything happens to you, your family will step in to help. You make sure you have income protection insurance, life insurance, TPD insurance, health insurance, car insurance, home and contents insurance, and decent savings to protect you from whatever potential situation that may wreak havoc onto your life. No one is going to save you, you’ll have to prepare for the worst.

          Like I said, lots of adults in Australia are like pampered children, sheltered from the world. “Oh the government will help me. The media will help me. This will blow over, I’ll just wing it and see what happens”. Makes me sick to know that lots of hard working people are doing the right thing living within their means and having savings and insurances active, and then there are those out there who actually don’t think things through.

          You don’t need a university degree to know that you need insurance to protect yourself and your family. You don’t need a university degree to know that if you’re getting this fridge, you actually have to friggin pay for it. Mate.. you’re getting 5 years interest free? You better believe that once that 5 years is up, there will be hell to pay, SO FINISH PAYING IT BACK BEFORE YEAR 4.999!!!!!!

          What’s so hard? Seriously? People need to be educated about these things? It’s common sense!!

          • +2 votes

            @BabsBBS: People need to be educated about these things?

            Actually some people do.

            Additionally if you have 5 kids and are on $50k per annum with a mortgage - how the F*** are you meant to afford insurance?

            • +1 vote

              @IHatePeople: Don't have 5 kids of you are on $50k a year? The world is overpopulated as it is.

              •  

                @brendanm: She had a job before she was injured - stupid woman.

                But I will make sure I always project my future 22 years in advance in every decision I make.

                Here is a question - should people who can't afford have even 1 child? Should we as society deny that?
                Do we as a society want replacement rate? Or is unlimited immigration (where we are competing with every other developed nation, so the immigrant standard is falling) something we should aspire too?

                Because many people don't think they can afford 1 (dual income), let alone 2.

                World is overpopulated.

                No its not.

                People has been talking about this since 1798 and got it wrong every time.

                • +1 vote

                  @IHatePeople: Having a job doesn't mean you should have 5 kids. She should have had some sort of employment insurance.

                  One child is vastly different to 5. Then only reason increasing population and immigration is wanted, is to increase profits for companies. More fighting over jobs equals lower wages, more people equals more potential consumers to buy crap they don't need.

                  The world is massively overpopulated. They are wanting us to start eating crickets to reduce the amount of resources going into producing meat. If there were less people, and some countries populations weren't growing exponentially, everyone could just enjoy themselves without having to scrimp, and the world would be much better off, with less pollution, deforestation etc

                  • +1 vote

                    @brendanm:

                    The world is massively overpopulated.

                    On what basis? There is enough food already to feed the population (from memory enough food to feed 150% of current world population).

                    They are wanting us to start eating crickets to reduce the amount of resources going into producing meat.

                    While the UN might dream of us eating crickets (as per their latest "study"), even in Asian they don't eat crickets as long term strategy for sustenance.
                    I suggest you have a look at how fast these countries are developing. Even Laos has more coffee shops per head of population in the 'CBD' than Sydney (with the standard cakes in the chiller)!

                    Beef

                    As people get richer their meat consumption does go up, but that is not the only option - chicken, pigs, etc.
                    Beef will get more expensive as per free market.
                    Of course if Governments taxed externalities it would happen faster. Some Governments are doing this (congestion charge in England, Carbon offsets, banning non electric cars (China), etc).

    •  

      it's pretty obvious that they genuinely think that they were unfairly treated… pretty stupid and serves em right

    •  

      @GG57 agreed. I think it's a fair assessment to equate one's financial position as generally being 25% due to one's "financial responsibility" and the other 75% being down to external structural factors - where one grew up, the support they received from family and friends, the level to which their mental health state allowed them to access state assistance services, the employment opportunities they were exposed, the education opportunities they were exposed to.

      It's sad that a post like this blows up, and gets the platform it desires, when it is so absurdly misinformed.

  •  

    Never mind, I can't read….

  • +6 votes

    How long until a GoFundMe pops up?

  • +8 votes

    I really want to reply to this thread but think our world views are so different there's no point. I feel sorry for the family.

    • +6 votes

      Fair enough. I just don't have any sympathy for people facing the entirely foreseeable consequences of a lifetime of financial irresponsibility.

      • +11 votes

        I will bite on behalf of one man clan.

        I do get the impression from this article that these Lion Finance guys take the approach of blunt force trauma to get their payday. Could a better alternative be reached? I would think so.

        Yes, it is fully within their rights and the law to do so, but I do not condone the 'take no prisoners' mantra. It looks like they have found an efficient way to reclaim the debt when the debtee owns their own home, albeit very destructive to the family.

        Long and short of it is live to your means to the best of your ability, as you really do not want a ruthless company like Lion on your case.

        • +4 votes

          While applying for bankruptcy is on the end of the spectrum, by the same token the point of having your debt being sold to a debt collection agency is also at the end of a very long line of (unbroken) mistakes.

          This isn't garden variety financial irresponsibility, which might be owing credit card debt and always carrying a high balance and paying exorbitant interest from month to month - this is a fair few steps beyond even that.

          • +3 votes

            @HighAndDry: That is a good point if it is already the end of the line for repaying the debt owed, then no foul on Lion for using a 'last resort' method.

            I guess my sympathy comes from the monetary value of the debt. Lion using their last resort option to claim the house.

            I am not very versed in debt and debt collection, maybe it is not as bad as I am assuming? But my first thought was something along the lines of "We want that 10k, so we are going to take your home". And on that premise, I can understand why people would have different viewpoints on this article.

          • +5 votes

            @HighAndDry:

            also at the end of a very long line of (unbroken) mistakes.

            It's really not. It can happen within a matter of 90 days. I used to be involved in this industry in some capacity. A particular bank I worked for/with didn't care if credit cards went into arrears. It's more interest and more penalty interest = more money.

            More often than not it's some sucker who the Bank had strung along for years making minimum repayments which didn't reduce the overall debt and decided to cash it in. They would have some hidden criteria that would trigger the Default Notice (s88) demanding full payment within 30 days. A lot of the time they didn't even have the customer's phone number or current address. They didn't know the reason for missing/stopped payments. Lost their job? Medical issue? Family breakdown? They didn't care and didn't want to know. Even when the customer did make contact in response, rarely could anyone pay that amount in time.

            30 days later it's assigned or sold to a debt collection mob. They wipe their hands clean, take their cents in the dollar from the collection mob, correlate the payments received over the term of the product, pat each other on the backs when the final figure is in the black, and carry on with the next customer/sucker.

            • +3 votes

              @zeggie:

              They didn't know the reason for missing/stopped payments. Lost their job? Medical issue? Family breakdown? They didn't care and didn't want to know.

              Their job is to lend money. The customer's responsibility is to repay it on time. The only reason they'd care would be for PR, not because they actually should.

              Again - being an adult means taking care of your responsibilities like an adult.

      • +5 votes

        at this rate i feel i need to upvote every single comment that you made..

        Sympathy for the family as they may face foreclosure over $10k
        but at the same time, i dont know why people feel that its unfair for people to be asked to repay debt.
        unless the lender forced a loan upon a borrower, the borrower had made a conscious decision to borrow and spend.
        if anyone had the thinking that they would be able to walk away from the loan without any repercussion, then its their own fault.
        there is a reason why they ask for you to declare your assets when they approve your credit card application aye..

        back to the couple, maybe they should try to lease out a few rooms at discounted rate with exchange of an upfront payment and use the cash to pay down that $10k.

    • +1 vote

      People need to take personal responsibility. Should everyone just get a free ride for making poor choices? I feel like that's what happens nowadays.

  • +20 votes

    What I find odd is the family in question is blaming Lion Finance.

    Why is it always someone else's fault?

    By the time a financial institution has taken the decision to accept a haircut and sell a debt to Lion, they have exhausted every avenue available to remedy the situation directly with the debtor.

    I fully support Lion Finance's endeavours to recover their money in whatever legal avenues they have.

    • +6 votes

      Fault shifting is #1 these days. Be as bloody ignorant and careless as you like but blame someone / something else for it.

    • +6 votes

      Here are a few steps to living a criticism free lifestyle:

      1. Ignore all basic common sense and dig yourself a nice financial pit.

      2. Go ahead and widen that pit. All that hard work digging a credit card crater has earned you a holiday… on a personal loan of course.

      3. Look for a sympathy angle. You've got kids? Great. That's the perfect sob story. No kids? Go get yourself a dog.

      4. Make a story that the masses can follow - David and Goliath is a good one. Interchange David with yourself and everyone else who has debt. Now make Goliath the bank and the spoils of victory as debt forgotten. I can get behind that train.

      5. Now, remove yourself from the picture and let the everyone who is riled up to stick it to the man. In the mean time, spend some more. You've earned it.

      • +1 vote

        Step 6 - Start a gofundme to pay off all your debt and go on another holiday, and shout the kids new iPhones.

  • +8 votes

    "We've never had any money. We're happy without money because we've got each other. It's never, ever about money," she said.

    I think this line sums up how they end up in this situation.

    • +9 votes

      Also - funny that despite it never being about money, they're happy to spend all that money they don't have.

  • +2 votes

    Prior to the Banking Royal Commission I know some people who have 6 figures credit limits with literally income of 10% of the average Aust salary .

    BTW they still have it , nothing was done to check past limits provided by the banks :)

    Wonder why some people got into trouble ?

    • +7 votes

      Wonder why some people got into trouble ?

      Inability to exercise self-control and do basic maths…?

    • +1 vote

      I am not 100% sure on what is the problem of high limits?

      The problem is people are spending these as if it is a free gift from the bank.. it is not.

      Wonder why some people got into trouble ?

      Because people think credit card is free money and need to be otherwise educated?

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