I wrote this article a while back on one of my blogs. I think somewhere at the back of my mind this must have got stuck. It is for this reason (amongst others) that the idea of trying to find solutions to the problems facing the debtor on the receiving end was born. And now I have just given the idea a name : The Big debt indaba
Details of the action, planning and other mindmaps will be posted here on an ongoing basis and I invite all interested parties to send me some detail of things that might be missing in the system as they encountered it - We cannot use all material but at least it will be there in the open for every one to see.
Watch out for my next post on guidelines in the process
The article that gave birth to the idea: - it was written on 25 August 2014 at 12.16am - why I wasn't sleeping I have no cooking clue...........................
Socio economic effects of bank's collection systems
Debt has a two sided face. The one
face is that of the Creditor and the other that of the Debtor. The one is smiling and the other one is not. I will leave it to the imagination of the reader to decide which one is which. One thing is certain: they are never the same.Banks and money lenders need customers to borrow money from them. This is the basis of the money system. You take money from depositors and pay them interest. You lend it to borrowers who pay you interest. There is a difference in these rates and the difference pays the overheads of the Creditor and makes provision for Debtors that get distressed and cannot pay their loans. The difference that is left is the bank's profit This is banking in its most basic form.
To make sure everything is in perspective I will be giving some definitions as I go along. A Debtor(or sometimes referred to as the client or consumer is the one lending the money and owing it to the Creditor. (Bank - financier)
Banks have over the years perfected (In their opinion) the system of collecting the money owed to them and I will discuss in some detail one of those systems
Banks "finance" purchases of homes by registering a bond or lien over the property thus financed and this will be their "security" in case the clients default on their payments. The banks have systems in place to "repossess' and sell properties of distressed clients. There is practically always a shortfall once the property has been sold between the price obtained and the outstanding loan. This is referred to as the shortfall.
Normally banks will persuade clients to sign a document called an Acknowledgement of debt to repay this.
The socio economic impact of the action is not discounted. This is (in my opinion) a heartless system and has only one purpose: to get the distressed client out of the way and get as much money back as possible in the most effective and cruelest way possible.
Of course it makes sense. But only to the banks. "So why are you attacking us?" they will ask - this has been done for ages and there is no other way.
Of course there are other ways and I am going to discuss this at length in follow up posts - keep watching !
