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“Debt is the Slavery of the Free.”

Publilius Syrus (Roman author, 1st century B.C.).

 

Why Mass Default?

Mass Default on personal debt will bring about immediate and total freedom from debt for the individual and is an effective form of protest against the banks and the government for the millions of discontented people who wish to see real change to the way the world functions.

Continuing to repay debt validates the current neo-liberal orthodoxy and only serves to keep it in place. The financiers and the financial system that serves them so well are dependent on the belief that people will repay what they borrow. But what if this were to change…

The Mass Default Movement

Traditional protest has proven ineffective and does nothing to harm the banks or financial institutions – they just wave their banknotes at you from their towers while you march on the streets. The only way to make them listen and to bring about a rearrangement of the world order is to target their weak point and the only thing that will make them sit up and take notice: the profit margin.

“Let us unite in our non-payment and have ourselves a mass default revolution.”

Paul Livingson, The Bankruptcy Diaries, 2011

 

MASS DEFAULT MANIFESTO

 

Much of the personal debt foisted on people during the easy credit years was a hostile act on the part of the banks and is odious debt. There is no moral obligation to repay this debt.

 

People should be free and able to live their lives without having their brief time on this planet ruined by those who chase profit for their own personal gain and at the expense of other people’s happiness.

 

There is no shame to being in debt as the system is set up for you to be carrying enormous liabilities and its survival is dependent on your indebtedness to keep feeding shareholder profits and bankers’ pay packets.

 

There is no stigma in defaulting. Default should be a purely economic decision, or one based solely on your desire to live; emotions or outdated ethical positions should not come into it and certainly not while the system is so weighted against the individual.  

 

Default is a necessary act, both for personal freedom and as an act of rebellion against the dominance and power of the financial institutions. Mass default will liberate the individual at the same time as undermining the power of the banks.

 

Who am I to be recommending Mass Default?

I have lived through the dark days of debt and know how a life can be blighted by this scourge of our age. I have also come out the other side by taking the decision to default. I am free from debt and each day I reap the rewards of a life unfettered.

Yet I see a world where millions of debtors remained enslaved to banks who have been bailed-out and have returned to ‘bonuses as usual’, a world of unfairness where the people at the bottom bear the brunt of savage cuts while those at the top suffer no hardship and continue to gain assistance from governments to further increase their wealth.

I do not propose Mass Default from an obscure philosophical position – I promote such action based on very real, first-hand experience. Life without debt is a life worth living. A debt free life can be yours if you want it.

 

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There's something about this debt that stinks!

The mountain of personal debt which many people are struggling to repay was leant by banks in the rapacious pursuit of profit, a hostile act that was not in the personal interest of borrowers – it is therefore ‘odious debt’ and should not be repaid.

 

Why am I in Debt?

Have you ever sat down and looked at your debt liability only to feel that somehow you’ve been played, duped or conned? Sure, you take responsibility for taking out all those cards and loans, after all, nobody was holding a gun to your head as you signed the agreements, but still, you can’t help feeling that it’s all a set-up. There’s something about it that stinks.

Why is it that you were lent so much money with few or no questions asked? Why didn’t the bank run a cross-check with other lenders to see how much existing debt you were already carrying? Yes, something’s not quite right. And if it feels a little like somebody maybe wanted you to be in debt then that’s because this is exactly the crux of the personal debt crisis and the reason why so many people are saddled with crippling liabilities: banks wanted people to have all their cards and loans because it meant big profits for them – they didn’t care whether it was going to be damaging for you or not.

And now you’re buckling under the weight of repayment. You’re looking at years of hard graft and are struggling to see the light at the end of tunnel. Well, there is an answer. As the world wakes up to the fact that the system is rigged in favour of the few, the legions of debtors in thrall to the power of the banks can, with a little smart thinking, extricate themselves from their trap by taking a cue from nation states who have successfully used the concept of odious debt to declare national debts unenforceable and as a justification for defaulting.

What is Odious Debt?

The term ‘odious debt’ is a fantastic phrase, evoking a sense that there is something rotten about a particular debt, that this debt stinks! But what exactly is odious debt?

The Wikipedia entry for Odious Debt describes the term as:

“In international law, odious debt is a legal theory that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable. Such debts are, thus, considered by this doctrine to be personal debts of the regime that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion.”

The founding father of the odious debt principle was Alexander Sack, a lawyer in post-revolutionary Russia. In seeking to distinguish between debts incurred for the benefit of a nation and debts incurred by a regime for self-serving purposes, Sack also considered the role of the lenders, believing that creditors who lent to regimes in the knowledge that the money would be used for ends which were contrary to the interests of the nation had actually committed a hostile act (with regard to the people) and consequently could not expect a nation freed from that regime to assume liability for these debts.

From Macro to Micro – how is my personal debt odious debt?

It is Sack’s identification of the lender’s role and recognition of their awareness that they were lending money in an unethical manner, purely in the pursuit of profit and without caring for the purposes to which the money was being put to, that is transferrable to the current personal debt crisis and consideration on the part of individuals in deciding to default.

Creditors who lent to people in the knowledge that the money being lent was contrary to the interest of the individual, as occurred with the predatory lending practices of the banks during the easy credit era, have created an odious debt at the micro level and this can be used as an ethical justification for defaulting on personal debt.

Consider the fact that pre-credit crunch, the banks were actively targeting people who they knew would never be able to fully repay their debts as these people made for the most profitable customers. If foisting credit upon Bill & Nora Poorfucker living on a council estate and working part-time in the local charity shop is not a hostile act on the part of the lender then it’s difficult to imagine what is. Also, the banks were so aggressive in their marketing and promotion of credit (think constant mailshots and credit card cheques landing on the doormat every other day) and didn’t care two hoots what people they lent to would actually do with money or what they wanted it for – just the type of practices that can be considered contrary to the interests of the individual.

When we consider the nature of the money lent during the credit boom – particularly why and how it was lent – a strong case can be made for justifying default (on personal debt) on an odious debt principle.

 

The number of asset-less debtors going bankrupt has reached such levels that the cost of processing these bankruptcies is becoming unsustainable for the Insolvency Service, according to Stephen Speed, chief executive and inspector general of the Insolvency Service, who was speaking at the recent Insolvency Today annual conference.

While this news of asset-less debtors using our easy bankruptcy laws to start afresh is encouraging, Speed also said that a point had almost been reached whereby taxpayer money would be required to cover the shortfall of the processing costs, which, according to reports, seems likely given that the Insolvency Service was forced to write of £81 million earlier this year.

Try the Banks

No, you're not having any of it back

Following the great taxpayer robbery of the banking bailouts – where free-market profit-chasers brought the world to its knees with their financial jiggery-pokery and eye-watering bonuses and then went cap in hand to the state when it all blew up – the idea of more taxpayer money being required to plug a hole, this time to cover the mistakes of individual borrowers, will no doubt result in more opprobrium being directed at debtors by the more pious sectors of society. Yet, and now stop me if this sounds ridiculous, surely it would be better to assess each individual’s case and try to determine whether the lenders had been at all culpable and had irresponsibly lent to people they knew would have little chance of paying the money back?

Making the banks pay for their mistakes and their greed – what a ridiculous notion.

Your bankruptcy will appear in the newspaper

To anyone who is maybe worried about their bankruptcy appearing in the newspaper, here I am talking about it in my home town newspaper. However, despite the publicity I am still a long way behind Kerry Katona.

You can view the pdf of the article here: Chron article 2

 

I was recently interviewed on the John Griff programme on BBC Radio Northampton. This was my first (and hopefully not my last) radio interview and it was a lot of fun. Amongst other things, we discussed my experiences of personal debt and bankruptcy which lead to me writing my book.

UPDATE: The interview is now available to listen to here.

I was recently asked by the guys from the Debtology website to write a guest post in response to an earlier article on the subject of bankruptcy (‘Bankruptcy – what IS the big deal?).

In my piece I talk about why we need our easy bankruptcy laws and also about how attitudes toward debt and bankruptcy are changing.  

If you are thinking about going bankrupt but are maybe worried about how you will be perceived, then you should definitely have a read.

The article is available here.

PS. If you are worried about debt and in need of free debt advice, then perhaps the guys from Debtology can help.

Talking about the Bankruptcy Diaries

A couple of weeks ago I was interviewed about my book by the lovely people at Hackney Hive. It was great to talk about the work and some of the issues around it. Thanks to all those at HH for showing their support for local artists. 

Below is an excerpt:

Hackney’s rich history has many aspects, but it is particularly feted for two things: being London’s revolutionary corner and its importance as an artistic hub. Often, these two collide and have provided many high points in Hackney’s cultural palette, especially its literary output. The best known of today’s Hackney literati is Ian Sinclair, a beacon for London literature. Lee Rourke is also proud to call Hackney ‘home’. It is time to welcome a new addition to Hackney’s artistic – and artistically revolutionary – spirit: Paul Broderick, author of the recently released The Bankruptcy Diaries. I was fortunate enough to be afforded a short audience with the author to talk about his book, why he wrote it and what he will be working on next.

“The Bankruptcy Diaries is truly a banquet for the soul of our modern moralists,” said Paul. “It’s one man’s journey – mine – from the youthful naivety of university and entering working life and my role in the broader fiscal complexities of the state to an enlightened awareness of the actual depth of today’s corporate exploitation of the individual. I present the work as a choice that many people are now – and many more soon will be – confronted with: levels of debt that can never be repaid. I took my choice on this – it’s all in the book.”

To read the rest of this article click here. 

A recent article by Lisa O’Carroll highlighted the interesting phenomenon of bankruptcy tourists from Ireland heading to the UK to discharge their debts. Due to more favourable insolvency laws – a bankrupt in the UK is discharged after just twelve months, whereas in Ireland it’s a draconian twelve years – Irish debtors are doing the sensible thing and crossing the sea for a quick release from debt.

Fish 'n' Chips, Tea, Becoming Debt Free

The most fascinating revelation in the article was that, ‘as few as 29 people were made bankrupt in Ireland last year’, a staggeringly low number considering the severity of the property crash in the Republic, especially when compared to the 79,000 who went bankrupt in the UK during the same period. It’s not difficult to deduce that the UK is effectively operating as Ireland’s bankruptcy court, which is considerably more helpful to Irish citizens than another bailout loan. Although ascertaining exactly how many of the UK’s bankrupts are made up of Irish citizens would be difficult, and clearly some Irish debtors will be eloping overseas without bothering with any formal debt discharge procedures (I would love to hear from you guys).

I just hope the message is getting through to the people at the bottom. The Irish banks have had their bailout, in turn subjecting citizens to some of the most brutal cuts in Europe. Now we hear tales of Irish property speculators bailing themselves out, by utilising UK laws. I’ve already called for a ‘People’s Bailout’, and now I extend this call to the people of Ireland – don’t be the chump left with a sackful of debt whilst everyone else extricates themselves from the mess. Get yourselves over to the UK and get rid of that debt!

Update: I have found a great article with information for Irish citizens wishing to go bankrupt in the UK. If you wish to know more then click here.

Thou shalt remain in servitude

The latest insolvency statistics were released yesterday and, as usually follows such announcements, the comment threads of news sites were awash with the protestations of indignant moralisers, complaining about the unjustness of it all – at how people can simply walk away and leave a trail of bad debts. Perhaps these preachers should stop for a moment to consider the absurdity of their outdated position?

Post- economic crisis, the banks have been bailed out leaving the citizens of this country to bear the brunt of savage cuts, which are the result of a huge deficit caused by the bankers’ unchecked greed and recklessness. Yet nothing has changed – the rotten system remains unfixed, and huge bonuses are being paid out once again. Proof of a return to ‘avarice as usual’, on the part of the global elite, was confirmed by Bob Diamond, CEO of Barclays, who last month brazenly told the Treasury Select Committee that, “there was a period of remorse and apology for banks and I think that period needs to be over”.

Ten Hail Marys...

In light of the gross inequalities of a rigged system – where the rich and powerful continue to profit and the masses take the pain – crying foul over those at the bottom freeing themselves from the debt shackles handed to them by the global lever pullers, is to effectively disseminate the banks propaganda for them, helping to keep the system functioning. 

A People’s Bailout

So the bankers have had their bailout and announced that their period of penance is over, but what of the millions of indebted people who don’t have anyone coming to their rescue? The people have an escape route too – in the form of easy insolvency laws. So if you’re over-indebted then don’t think twice about opting to bail out. Certainly don’t listen to the howls of righteous indignation as you announce your decision. Grab the parachute, take the leap, and float down into the land of freedom…

Can't handle life in a cage man

With massive student protests taking place in London today I’ve noticed a lot of web chatter about potentially putting oneself through university, racking up the fees and then declaring yourself bankrupt afterwards. A very shrewd move. However, this loophole was closed years ago after a few canny students began doing this. But the idea is a good one.

Sing for Free Education!

My advice would be to pay off the student loans with personal loans and credit cards before going bankrupt. However, one needs to be very careful here. The authorities are not stupid and could either reject your bankruptcy petition, or slap with you with a restriction order that lasts a decade. For this reason I would allow a good stretch of time to pass after paying off the student loans, keep racking up as much debt as possible – have ball whilst you’re at it – and then press the bankruptcy button a year or two down the line. I’m not sure whether this would work but I’d love to see somebody try. Well, it has been a day of protest and revolt…

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