# What are the penalties for stopping payment of loans?



## redbhoy (25 Feb 2010)

If someone was to realise that the system of credit is one big farce and decided to switch current account to a different bank and have wages paid in there whilst simultaneously ceasing to pay all credit agreements with previous bank?
Whats the worst that could happen?


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## jhegarty (25 Feb 2010)

You credit rating goes down the drain , the bank sue you , you loose your house/car/tv/dog ......

You never get credit again becuase of the judgements.


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## Boyd (25 Feb 2010)

Funnily enough this was what Bill Cullen was suggesting people should do with their mortgages when speaking on Frontline on Monday! He really does get on my wick.....


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## MANTO (25 Feb 2010)

redbhoy said:


> credit agreements


 
and thats exactly what they are.


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## redbhoy (25 Feb 2010)

I was reading somewhere that the banks dont actually have anything to lend until you sign the agreement with them. If they were to bring you to court wouldnt they have to show that they were at a loss to sue you? 
How could they do this? What did they lose?


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## jhegarty (25 Feb 2010)

redbhoy said:


> I was reading somewhere that the banks dont actually have anything to lend until you sign the agreement with them. If they were to bring you to court wouldnt they have to show that they were at a loss to sue you?
> How could they do this? What did they lose?



It's a complete bull theory.

If it was true then every court case would fail on that point and international finance would grind to a halt tomorrow.


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## redbhoy (26 Feb 2010)

jhegarty said:


> You credit rating goes down the drain , the bank sue you , you loose your house/car/tv/dog ......
> 
> You never get credit again becuase of the judgements.


 

What if one didnt have a house, car, tv or dog?? And one didnt care about ever applying for credit again because of the trouble it has brought?
Is it possible to go to prison for not paying?

How long is your credit rating affected?

Thanks


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## jhegarty (26 Feb 2010)

redbhoy said:


> What if one didnt have a house, car, tv or dog?? And one didnt care about ever applying for credit again because of the trouble it has brought?
> Is it possible to go to prison for not paying?
> 
> How long is your credit rating affected?
> ...



One could end up in prison eventually if one could pay , but didn't.


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## dmos87 (26 Feb 2010)

As far as I am aware, once your credit rating is affected, thats it.


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## redbhoy (26 Feb 2010)

dmos87 said:


> As far as I am aware, once your credit rating is affected, thats it.


 
My sister used to work in a bank and said it used to be a mark on your rating for 7 years but now its only 5.


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## dmos87 (26 Feb 2010)

does that mean any payments missed are only on your credit rating for a few years? I always assumed it was blackened forever....!


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## jhegarty (26 Feb 2010)

redbhoy said:


> My sister used to work in a bank and said it used to be a mark on your rating for 7 years but now its only 5.



5 years from when the loan is paid off.

It gets more complex when there is a judgement involved.


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## Mongola (26 Feb 2010)

It is simply morally wrong. If that "someone" entered an agreement with a bank, then that person should honour that agreement! Simple as that! It is so wrong on so many levels! I do hope that "someone" thinks before acting...


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## dmos87 (28 Feb 2010)

+1 Mongola. Dont draw them on yourself. If you can pay, pay. You cant guarantee yourself you wont want a house in the future and its a silly gamble.


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## Noor77 (28 Feb 2010)

Mongola said:


> It is simply morally wrong. If that "someone" entered an agreement with a bank, then that person should honour that agreement! Simple as that! It is so wrong on so many levels! I do hope that "someone" thinks before acting...


 
Totally agree. Don't take the money unless you are going to pay it back. Would you arrive up at the cash desk in the supermarket with a trolleyload of groceries and say you were going to take it all home but you didn't quite feel like paying for it ...


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## redbhoy (2 Mar 2010)

Mongola said:


> It is simply morally wrong. If that "someone" entered an agreement with a bank, then that person should honour that agreement! Simple as that! It is so wrong on so many levels! I do hope that "someone" thinks before acting...


 
And the banks have loads of morals dont they?? At the end of the day what are the banks losing if the loans arent paid? Digits on a screen maybe?
If someone was at a loss I could agree with the supermarket argument but what does the bank stand to lose? Did they have anything to  lend in the first place?


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## jhegarty (2 Mar 2010)

redbhoy said:


> And the banks have loads of morals dont they?? At the end of the day what are the banks losing if the loans arent paid? Digits on a screen maybe?
> If someone was at a loss I could agree with the supermarket argument but what does the bank stand to lose? Did they have anything to  lend in the first place?



The same could be said of your bank account. It's not real , all just digits on a screen.

You don't mind if I empty out those digits do you ?


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## redbhoy (2 Mar 2010)

jhegarty said:


> The same could be said of your bank account. It's not real , all just digits on a screen.
> 
> You don't mind if I empty out those digits do you ?


 
Yes, but at least I had to do some work to put those digits on that screen. What did the banks to to loan me credit? Were they at a loss?


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## jhegarty (2 Mar 2010)

redbhoy said:


> Yes, but at least I had to do some work to put those digits on that screen. What did the banks to to loan me credit? Were they at a loss?



They (or the tax payer) have to pay the money back later. 

It's the same for the bank as it is for you.


If they didn't need to pay the money back then there would be no problems , and AIB wouldn't be reporting billions in losses.


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## redbhoy (2 Mar 2010)

jhegarty said:


> They (or the tax payer) have to pay the money back later.
> 
> It's the same for the bank as it is for you.
> 
> ...


 
So I end up paying it back anyway, through my taxes? Well then, my conscience is clear.


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## jhegarty (2 Mar 2010)

redbhoy said:


> So I end up paying it back anyway, through my taxes? Well then, my conscience is clear.



Right, but so do I.

Why should I pay for you new car ? I already paid for my own


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## redbhoy (2 Mar 2010)

jhegarty said:


> Right, but so do I.
> 
> Why should I pay for you new car ? I already paid for my own


 
You shouldnt. But we are all paying for the banks mismanagement anyway so whats a few extra euro going to do?


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## jhegarty (2 Mar 2010)

redbhoy said:


> You shouldnt. But we are all paying for the banks mismanagement anyway so whats a few extra euro going to do?



Because the banking system would collapse , and your current account I mentioned above would be now be gone.


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## redbhoy (2 Mar 2010)

jhegarty said:


> Because the banking system would collapse , and your current account I mentioned above would be now be gone.


 
Good, because it hasnt been in the + funds zone for quite a while thanks to the loans I owe for. 
My pay has been drastically reduced in the last while thanks to the banks and their mismanagement.


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## nediaaa (2 Mar 2010)

money is money whether digits or scribbles. Yes it is the banks money.
to do what you are doing puts you up high on the stupidity stakes. It is the rest of us that have to pay in the end


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## jhegarty (2 Mar 2010)

redbhoy said:


> Good, because it hasnt been in the + funds zone for quite a while thanks to the loans I owe for.
> My pay has been drastically reduced in the last while thanks to the banks and their mismanagement.



You just lost your job because your company lost all it's cash reserves and now has no way to accept payments.


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## redbhoy (2 Mar 2010)

nediaaa said:


> money is money whether digits or scribbles. Yes it is the banks money.
> to do what you are doing puts you up high on the stupidity stakes. It is the rest of us that have to pay in the end


 

Its the banks money?? Had the banks got this money to loan in the first place? Or had they a fraction of it and they never really lent anything?


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## nediaaa (2 Mar 2010)

it is the same as a small firms overdraft. It is not their money but they needit to keep giong. Did you ask the bank at the time if it was their money.
Grow up


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## Mongola (2 Mar 2010)

_


redbhoy said:



			And the banks have loads of morals dont they?? At the end of the day what are the banks losing if the loans arent paid? Digits on a screen maybe?
		
Click to expand...

_


redbhoy said:


> It is quite interesting you say that. Banks might not have any morals but this did not stop that someone to go to them in the first place when he needed the money, did it? Isn't that a bit of a double standards here?_??
> 
> _You borrow=you pay.
> 
> I understand that we are in a difficult climate and that  some people_'s _situations have  suddenly changed, fair enough but if this happens, people with some kind of moral will at least try to address the situation and work out some kind of plan with whichever financial institutions they are in trouble with. Here the question was completely different, we are talking about someone who made a CONSCIOUS decision to borrow money and apparently suddenly was touched by the light and realised that the financial institutions are a big farce (in his opinion)! Isn't that a bit of an easy escape?? Wrong...just wrong!!!


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## redbhoy (2 Mar 2010)

Thats a fair appraisal of the situation there Mongola. 
If you were providing help to someone and then realised that they were the devil incarnate would you withdraw your help?


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## Papercut (2 Mar 2010)

redbhoy said:


> At the end of the day what are the banks losing if the loans arent paid? Digits on a screen maybe?


  The notion of an individual’s debts merely being digits on a screen has a basic flaw. These digits represent digits that also appeared in your bank account as a credit, which enabled you to spend or pay for something. These digits also represent an amount of real money that you agreed to repay, & appear on your legal agreement documentation with the bank. The thing is, what the digits represent (the amount of your debt) exist whether the screen is switched on or off. When the screen if off the digits go away, but the debt that you agreed to repay still exists.

  What if the bank processed your wages as a debit on your account every month instead of a credit? Would you just shrug your shoulders & say it’s only digits on a screen, or would you get straight on to the bank & instruct them to rectify the situation, because you are unable to withdraw cash from the ATM due to the fact that the digits have two characters beside the digits that represent your balance or available funds: DR  Would you accept the bank telling you not to be silly, if you weren’t happy that you could open an account elsewhere, & that the money due to you was just digits on a screen?

  It is however a nice notion, one that I like a lot, but the comparison is more apt when referring to age as being a number, rather than to a debt as being a digit IMO.


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## UFC (2 Mar 2010)

redbhoy: life isn't fair. If you analyse anything in great detail you'll find all sorts of problems. There is corruption and ridiculousness everywhere. That is life.

By all means drop out of the system and move to the countryside, grow your own vegetables, raise your own animals, generate your own power source.

But you made an agreement to be a part of them system when you applied for and accepted that loan. So until then, you should do the right thing and pay off your loan.

You can then drop out of the system and do whatever you want.


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## nediaaa (2 Mar 2010)

it is a transaction.
Keep your side of it


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## redbhoy (2 Mar 2010)

Thanks UFC. My Mam always told me that too. 
You've got my line of thinking alright. But I feel if I keep going I actually helping the system whereas if I drop out right now, I'll hinder that which I deem to be a kind of evil.


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## nediaaa (2 Mar 2010)

there is XXXXXXXXXXXXXXXXXXXX to help you= see no devil see no evil. then your problem should be solved. Stay away from the head shops


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## redbhoy (2 Mar 2010)

nediaaa said:


> there is XXXXXXXXXXXXXXXXXXXX to help you= see no devil see no evil. then your problem should be solved. Stay away from the head shops


 
I dont do drugs. Only one of the legal ones- alcohol although Im giving that up I swear.
If you've any decent contribution feel free to stick in on the thread but resorting to name calling doesnt help your argument.


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## Digger (2 Mar 2010)

If i reached a point where I had no assets and no means to service a loan, would it get to a point of whereby somebody would be jailed,but then 5 years down the line a new clean bill of health would be on your credit record. ?
If doing a short stint in jail would appease the banks for a fairly large sum owed i would consider this an option redbhoy, if no other avenue was open and it went to court.


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