Major consumer collapse - debt collections down bigtime

[grapejelly]

http://online.wsj.com/article/SB1226..._whats_news_us

Because collecting on unpaid bills has become more difficult, debt buyers have become more cautious about what they purchase, and the price of unpaid debt portfolios has fallen.


Mr. Neeb of Affiliated in Omaha says that public utilities used to be able to sell uncollected debt that was 12 to 24 months old for three to four cents on the dollar. "Now, you're looking at two to three cents," he said.

What's staggering to me is the speed of this decline...

[sn1p3r]

Re: Major consumer collapse - debt collections down bigtime

That seems to be the theme at ground zero...not quite sudden stop but definitely a slamming of the brakes...hope we don't get "rear-ended"

[phirang]

Re: Major consumer collapse - debt collections down bigtime

this is actually very, very negative for all inflation hedges.

be warned.

[tree]

Re: Major consumer collapse - debt collections down bigtime

A friend who is an debt collector attorney with credit card company clients said that he frequently gets wage garnishment orders of 25 percent of delinquent credit card debtors' gross pay.

I asked Elizabeth Warren, bankruptcy expert at the Harvard Law School, whether debtors' hardship arguments could get them a reduction of that judgment. She said in general no.

Now that the major card-issuing banks are partially tax-payer owned, I wonder whether Washington will suggest they stop skinning the debtors so hard, since many might wind up homeless (or, at best, standing at line at the food banks) if they lose 25 percent of gross pay...and, if so, what that in turn would do to the holders of those securities including credit card debt.

Is any of this possible to sort out? It's mind-boggling to me.

And please, don't tell me that the credit card holders are responsible for their debts. That's obvious--and I agree. But we're beyond that now, just as we are with mortgages...social chaos is around the corner...unless of course you are holed up in your cave with canned food and ammo. Me, I still want to walk the big city streets.

[sunskyfan]

I agree. This is getting out-of-control quickly. However, I think the mistake made is not making credibility of the government and the dollar the number one concern. We have meen focused on preserving the credibility of the Financial Markets first and now we will move on to just markets say with the auto bailout. It is not insanity to think it is all going to hell quickly. We need to break this cycle and focus on making sure our basic society works.