Consumer debt is "basically optional," but debt collectors rely on you not knowing that

Originally published at: Consumer debt is "basically optional," but debt collectors rely on you not knowing that | Boing Boing


Something TFG has known his whole life.

People have been following him for his crazy life hacks for years; surprised this one didn’t sink in sooner.


Gosh, that must be nice for you.


So, his “life hack” is to take money from people to buy what you want and then refuse to pay them back?


In addition to the aforementioned ways of making your life hellish, the non-moralized downside of not paying your debts is the inability to take on more debt in the future. So sure, if you already own your home and your car outright and have enough cash on hand to pay all future expenses as they come up, then you do you! Just hope you don’t suddenly need to rent an apartment, or anything else that involves a credit check.


Exactly. A situation a lot of Americans are in.

When faced with a hypothetical expense of $400, 68 percent of all adults in 2021 said they would have covered it exclusively using cash, savings, or a credit card paid off at the next statement (referred to, altogether, as “cash or its equivalent”).35 The remainder said they would have paid by borrowing or selling something, or said they would not have been able to cover the expense.

So almost a third of Americans are in exactly the situation you describe. But of course they’re all “deadbeats” (and not in the credit card industry’s use of the term, which they reserve for people who pay off their balance in full every month, thus depriving them of the profits of usury).


Everybody’s reading the article and not just commenting based on the BB interpretation, right? :wink:

Because that link is broken for me:

It’s a long, long piece, but well worth reading.

[Credit card debt collection] (http:// credit%20card%20debt%20collection/) [Patrick McKenzie / Bits About Money]


Debt is often a symptom rather than a cause. There are a minority (including in my family) who would spend a dime if they found a nickel, but that’s rare. To bolster my point, I was looking for a good Robert Reich video specifically about consumer debt but didn’t find one. It’s interspersed in about everything in the economy so, a plug for his whole channel…


Did you grow up in a home with both parents and go to a decent school? Did you have a safe trip to and from school every day, and good food to eat and a quiet place to do your homework and to sleep? Could you concentrate on going to school as a minor instead of working long hours to help your family pay the bills? Did your parents have a nest egg thanks to their own parents being able to afford a home after WWII? Did you easily get hired once the company met you face-to-face?

The list of questions could go on for hours. You don’t realize how privileged you are, so you think it’s due to your individual superior ability to be ‘responsible’. Instead, it’s because you won the genetic lottery by being born into your family rather than someone else’s.


This effectively makes paying consumer debts basically optional in the United States, contingent on one being sufficiently organized and informed.

While this is true as far as it goes, it feels like a bit of a blithe dismissal of the consequences if the debt is large enough to bother suing on. As the article recognizes, it’s a robo industry that focuses on getting default judgments, and having a default judgment against you for a couple thousand dollars is NOT GOOD despite it being optional.

They can garnish wages, which involves your employer getting a letter that may not be well-received, it shows up on background checks that can cause problems for any number of employers, and it can make getting loans (especially a mortgage) incredibly expensive if not impossible.

It’s all well and good to recognize all the dirty tricks these debt collector scum employ (and they are, without exception, scum) to make people think the world will end unless they pony up, but it’s also good to balance that with the reality that there usually is a long-term cost to defaulting on a debt that can and often does far exceed the original debt itself.


For unsecured debt in Pennsylvania:

There’s a limit on collecting for good reasons- just like debt jubilees.

If you had old debt that you couldn’t pay off- never tell a debt collector it’s yours. They’ll try to get you to say that - and it can reaffirm the debt and start the clock ticking again.


The linked and summarized article goes into detail on how to make sure those impacts don’t hit, and even turn them back on the shitty debt collectors.


And when you’re in that bad of a position- you’ve probably already run out of options. Maybe lost your home or had your car repossessed.


I’m sorry, I might have missed that part of the article. I see where it discusses the process of mass filing for default judgments, and that often the case will be dismissed if the debtor shows up (especially with an attorney), but I don’t see a section about how to avoid the negative effects of a default judgment, or avoid judgment if the collector happens to have their ducks in a row. I think this article has a lot of great info, but I also think the headline on BB is a bit misleading.

(FWIW I represented debtors pretty regularly a whole long time ago and am pretty familiar with how these cattle calls work; sometimes showing up gets it dismissed, but often it doesn’t, especially if the amount is more than one or two thousand, and unfortunately a lot of judges are willing to give the collectors another bite at the apple to request the original contract and set a trial date, meaning the debtor has to take another day off work and hope to beat it at trial; often they don’t)


I bet you’re a hoot at parties…


The outline is right in the summary:

So you’re right, it’s not a method for dealing with default judgements. It’s earlier in the process than that, when you first get notified of the debt going to collections. That’s where you can derail the process.


This sounds an awful lot like this lady: Followers of QAnon ‘Queen of Canada’ face mounting problems after being convinced utilities are free


You can sometimes derail the process by doing that, but it is far, far from a guarantee. And in my opinion, based on some amount of personal experience with the process with both the collectors and the court, bluffs regularly get called by these collectors.

That’s what I believe is being somewhat glossed over with the “basically optional” framing. Again, I think there is a ton of really useful info here, but that relatively minor point did jump out at me.


I went bankrupt in the early 90’s.
As brief as I can:
Got divorced after a two-year marriage.
Couldn’t keep up with paying half the mortgage and rent on my own place.
Surrendered the house to ex.
Too late - now in quite a lot of debt, which kept mounting on interest - three or so credit cards.

After three more years of sheer anxiety I went to a judge, who told me I had paid more in interest than I had ever borrowed, and she duly made me bankrupt and kept the debt-collectors from ever getting near me. The debt ended up being about £17000.

TL/DR: I was on a good wage, but not good enough of a wage to keep up with certain greedy capitalist institutions.


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