Thread: Bill Collectors (rant warning)

Originally Posted by welshwizard

My parents had severe money troubles connected with their business when I was growing up. It is a long and painful story.
50 yrs on I am still running the business. What I learned was, to avoid if at all possible, borrowing money.

It seems an unfashionable concept, but my old man also taught me "neither a borrower nor a lender be". Apart from the house, I've stuck 100% to that principle. CC bills are paid in full every month (the bank does NOT like that!), and if I can't afford it, I don't buy it.

You make an exception for your home for obvious reasons. The only other thing I would consider borrowing money for is my children's education.

And Bruno's advice is spot on: don't ignore it -- it won't go away. EVen if it's their error, you've got to jump on it immediately or the can of worms just gets bigger and bigger.

Originally Posted by Bruno

If you had the money, it would have been better to pay it immediately. Anything you need to sign up for / deal with other people on a continued basis only complicates things.

While I understand your comment here, business school teaches us that borrowing money for free is always the better deal. That money can then be used to earn interest in another account until its needed, which makes the item "cheaper" in the long run.

That was your first mistake. If something seems odd, you check first. Banks and credit agencies don't like being paid too early, because that money is not supposed to come in yet, and it requires human interaction to make it go somewhere. Too early is as much a nuisance as too late. And if something seems wrong, it's always better to check than to assume.

I'll admit this was a bit of a mistake on my part, but my USAA credit card always shows a $0 minimum payment, rather odd, yes, but because of this I wasn't too concerned with the $0 minimum payment listed on the account.

mistake number 2. If you get formal papers, you check it with the sender before ignoring it. As with unscheduled payments, banks and credit unions don't like it if people ignore letters.

I believe it was an automated "your statement is available" e-mail... I always sign up for paperless if the option is given.

So you ignore the first couple of mails as well?
You should have known by now that something was amiss, no?
Ignoring people doesn't make them or the problem go away.

Not mails.. calls. I do not answer the phone if I don't recognize the phone number, and if they don't leave a message on my voicemail then I continue to ignore the number. In this case they were persistent enough that I put the number into Google to see who it was, and saw GE Money so I picked up next time.

Yes, paying early is as bad as paying late.
Those finance systems know when to expect a certain amount. all money that is outside of the window or in a different amount causes problems.
If you pay bills and pay 1 cent too much, you are causing significant problems and paperwork

Maybe it works different where you live, but I always pay more than the minimum payment. On any interest bearing account (credit card) I pay the full amount every month. On my home loan I usually pay an extra $100 or so on each statement. On the mattress account I have to pay just under $80/month to be paid in full at the end of 6 months (the end of the interest deferment period), so the $15 minimum payment is wholly inadequate. I've never once had a bank or lender question me for paying "too much".

Pay cash for everything but your house, and I would do that if I could. If I don't have the cash, I don't need the stuff.

Originally Posted by Alembic

Pay cash for everything but your house, and I would do that if I could. If I don't have the cash, I don't need the stuff.

...and I would add...make sure you can put at least 20% down on a house and the monthly mortgage payment is no more than 40% of your net income. Just an estimation.

In my profession, I deal with debtor/creditor issues all day everyday. This is the simplest, soundest advice anyone could give. It is amazing how many people live above and well beyond their means.

Originally Posted by Alembic

Pay cash for everything but your house, and I would do that if I could. If I don't have the cash, I don't need the stuff.

My grandfather never borrowed money for anything, it was always cash, even in the 30's during the Great Depression he paid 5oo$ cash for his first home. A two room structure. He said that if he did not have the cash, he did not need it. Thats a hell of a lot different from what we are told now. If you look at the financial woes of the world, it all revolves around borrowed money that has been spent, no one wins but the banks.

Originally Posted by Alembic

Pay cash for everything but your house, and I would do that if I could. If I don't have the cash, I don't need the stuff.

I agree with this in principle. That said, I use actual cash for a minimum of transactions, as my credit cards give me rewards (and I pay off every month). My dad has always made a habit of borrowing money any time he could get a lower interest rate than whatever he could "store" his money for. He financed several cars even when he had cash in the bank to pay for them, just because he could earn 6% and get a 4% finance rate.

My future father in law keeps a car payment, even though he can pay it off because it is a deterrent to him buying another car, and helps him budget.

I'd simplify the statement to "live within your means". Obviously if you only pay by check/debit/cash then you don't have any other option, but there are other savings to be found, so long as you don't go crazy.

For what it's worth, I'm only 24, and the only "bank" loan I have is for my house... I have a car loan too, but that's through the worlds best bank... bank of dad.

Originally Posted by nun2sharp

no one wins but the banks.

Ain't that the truth. There was a BBC documentary aired this week called "How the banks won", about how we all bailed them out and we're all suffering as a result with austerity this and austerity that, yet for the banks it's business as usual, continuing to coin it in.

Originally Posted by majurey

Ain't that the truth. There was a BBC documentary aired this week called "How the banks won", about how we all bailed them out and we're all suffering as a result with austerity this and austerity that, yet for the banks it's business as usual, continuing to coin it in.

To be fair, some banks failed miserably because of their irresponsible lending. Some banks "won" because they were bailed out by us via the Federal Government. So the banks that won were the ones with the most "political clout."

I blame the Government, not the banks.

Originally Posted by Fbones24

To be fair, some banks failed miserably because of their irresponsible lending. Some banks "won" because they were bailed out by us via the Federal Government. So the banks that won were the ones with the most "political clout."

I blame the Government, not the banks.

Who do you think owns/controls the government? Obviously it has not been the people.

Originally Posted by nun2sharp

Who do you think owns/controls the government? Obviously it has not been the people.

No it has not been and that is the sad part. Ownership and control are two different things. While nobody owns the government, I do agree with you that "private interests" control the government. Again, I still blame the government for allowing it to get to that point. However, to be fair, it is the people who elect their representatives and their leaders. So "the people" are not completely free from blame.

FWIW, I am a minarchist, so you get where I'm coming from.