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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 Default should be a purely economic decision, or one based solely on your desire to live; emotions or outdated ethical positions should not come into it and certainly not while the system is so weighted against the individual.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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Who will enter the Bankruptcy Hall of Fame?

It’s almost time to close the piss-takers parade that is the ‘Bankruptcy Heroes’ poll and announce a winner. However, the audacious debt-dodging deeds of regular punters Phillip Hoare & Leigh Cooke, have put them way out in front of the chasing pack and this pair are currently neck-and-neck with 21% of the vote each!

An outright winner is needed so I can track them down to present them with their award: a copy of The Bankruptcy Diaries and an interview slot on this blog.

So, please cast your votes and decide who should enter the Bankruptcy Hall of Fame – should it be the ex-copper with many vices, or the smash ‘n’ grab chancer?

You can cast your vote by visiting the Bankruptcy Heroes page. Voting closes at the end of the month 30/11/2011

The levels of personal debt incurred by young people today are creating a generation of people locked out of acquiring property and other assets that previous generations have enjoyed, according to a recent CCCS report ‘Debt and the Generations’.

Young people are increasingly concerned about their debt problems

The report states that consumers are now ‘acquiring large levels of debt, especially unsecured debt, much younger’ and, that, ‘due to rising house prices and reducing incomes it seems unlikely that younger households will be able to acquire assets in the same way their parents and grandparents did.’

The report also identifies the impact of rising student loan debt on the ability of young people to acquire wealth. And it is no surprise to read in the report that those who cannot count on help from ‘the bank of mum and dad’ (or mummy and daddy), will be more affected by debt, thereby exacerbating existing inequalities.

 

Economics for the Debt Generation

Faced with such a bleak future and a system that is so weighted against them, young debtors need to take a step back and think purely in terms of self-interest and look at the cold, hard economics of the situation: would it be more financially advantageous to default on their debts and have them written off and then begin the process of saving?

It's all about freedom

It would be fairly easy to sit down and work out how long it would take to pay off existing debts, as well as calculating how little could be saved during the years of debt repayments, then compare this to the amount that could be saved during the same period if there were no debts to pay. Without debts to pay it is highly likely that if an individual were so inclined, that by the time their debts would have been paid off that they could have saved enough money for a large deposit on a house. Of course, if you default then your credit rating will be bad for 6 years but it is likely to take debtors far longer than 6 years to repay their debts, so for most debtors, default will still make sound economic sense.

Above all, it is simply a financial decision, the type that big banks and financial institutions perform daily and without emotion or moral considerations clouding their judgement.

It is important to remember that not everyone is obsessed with getting on the property ladder but the same logic applies to young debtors who just want to live.

The essential question that every debtor should be asking themselves

One thing to investigate when considering default is the prospect of post-insolvency restrictions such as Income Payment Orders, but these can be avoided, principally if you happen to be unemployed at the time of your insolvency. This was how it turned out for me and is something I explained in my book. However, while I could have used the last few years to save, I preferred to invest in myself and work fewer hours in order to pursue creative projects. Whatever your goal, the question of debt always boils down to the same question: would default enable me to achieve what I want quicker than repaying my debts? This is the essential question that every debtor should be asking themselves.

Other key findings of the CCCS report:

• Increasingly first time buyers (FTBs) can only get onto the housing ladder with help from the ‘bank of mum and dad’ – 45% of all FTBs in 2010 received financial assistance, compared to 20% in 2005. For FTBs under 30, 84% require financial assistance in order to buy. This is leading to the exclusion of poorer young households from the housing market and perpetuating existing disparities in wealth within generations.

• The decade in the run up to the financial crisis saw a huge transfer of wealth from younger home buyers to older generations through the mechanism of rising property prices, and taken together the over 60s now own nearly half of all net assets in the UK. In contrast the under 30s own just 5%.

• Student loans will also impact on the ability of younger households to acquire wealth. Total student debt outstanding is expected to grow to £153 billion in real terms by 2031, with loan repayments amounting to nearly £7 billion a year. With student loan repayments reducing available income, future generations will find it difficult to save or invest in pensions until they are older, which will impact considerably on their quality of life when they reach retirement age.

Stressed Borrowing = Desperation

Today’s press is full of reports of Britain’s return to borrowing on credit cards and personal loans, however, unlike the orgy of spending during the pre-crisis years this recent spike in unsecured borrowing is a result of people being unable to pay for essentials – what is known as ‘stressed borrowing’. Some of the key facts are:

• Borrowing on cards & loans has been increasing over the last 7 months as households struggle to make ends meet.

• There was an increase in borrowing on cards & loans of £629m in September compared to the August increase of £478m. The total figure for individual borrowing now stands at nearly £1.5 trillion.

• Borrowing on cards & loans is increasing at double the rate of mortgage lending, suggesting that people are turning to credit to get through the month. This is backed up by research from Shelter

 

Stressed borrowing = desperation

I myself am no stranger to stressed borrowing, having overspent on cards and loans and then finding myself in the dreadful position where I had to resort to credit card borrowing to get through the month. This awful vicious circle – involving endless anxiety, sleepless nights and stress – where debt spirals out of control, inevitably leads to a full blown debt crisis and is something I documented in my book. Whatever the cause of your stressed borrowing it is essential to face up to the reality of the situation: borrowing on cards and loans to pay for essentials and get through the month is a sign that things are out of control and you are only compounding your situation by continuing to borrow.

 

What to do?

If you are borrowing to get through the month then clearly you have a problem and need to do something about it – your situation will not improve if you fail to confront it and do nothing. Be decisive; today is the day you are going to regain control of your life.

Can you negotiate a move favourable repayment plan with your creditors? Is this even a realistic proposition? Perhaps you are a mini-Greece and no amount of restructuring is going to help, as you would simply be delaying the inevitable and enduring miserable living conditions in the process. So investigate different forms of insolvency: Debt Relief Orders, IVA’s or Bankruptcy.

Whatever your situation, it is vital that you DO SOMETHING ABOUT IT! Your life will not improve until you do. The best thing I ever did was confront my problem and take a decision. Think about how good it is going to feel when you do hit on a solution and think about how you’ll feel on that day when you are finally debt free…

 

Help! I’m in trouble – Where to go for debt advice

If you are struggling to get through the month or worried about debt then I would suggest trying the Consumer Credit Counselling Service’s ‘Debt Remedy’ online advice facility, as well as encouraging you to look at forums on the Consumer Action Group website, specifically ‘Debt’ and ‘Banks & Credit’.

Never pay for debt advice as there are plenty of charities and forums that will give you the same information without seeking to profit from your situation.

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.

 

Thanks to Patricia Smith from the altruistic debt advisers at ‘YesDebtFree’, I am pleased to announce the launch of a new section of this site: Free Debt Advice.

Patricia’s first post, on the subject of debt management companies, is a must-read for any debtor considering seeking outside help with their liability.

There are many unscrupulous organizations out there that prey on the indebted for their own gain, and their ‘advice’ tends to leave the debtor in an even worse position – hardly what you need when the walls are closing in.

Once again, a big thank you to Patricia for her contribution.

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