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Madmorrigan
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Topic: Eliminate the "legal" loansharking Posted: 02/June/2009 at 6:55am |
Indeed, but then the citizens might be free to do what they will with their money, thereby eliminating the financial slavery that keeps the lot of us compliant with the government's ridiculous policies.
Slaves don't have the luxury of being able to question the master, lest they be beaten and starved.
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Sammy44
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Posted: 02/June/2009 at 2:07am |
I can't understand why Canada does not do like some other countries, where if you are a native of that country, your post secondary training is free. I think something like that would stimulate the economy more than putting people in debt. You would also have more people with higher education and better jobs, which means more money, which means more spending and therefore a better overall economy.
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paulaffleck
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Posted: 06/January/2008 at 12:35pm |
People have trouble paying off their student loans and this leads you to proclaim, "ANARCHY!"
Please.
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msdieckman
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Posted: 02/January/2008 at 2:45pm |
Yes you are absolutely correct. All student loans offer to the Canadian Government a secured and steady income at the expense of the working poor. These tactics are no better than those of loan sharks. I believe that Canada has been on the road to anarchy for quite some time. I even had the department of Political Science at the University of Alberta scream and shout at me through the phone - "Where when you look out your window do you see mayhem?", he shouted. Unbeknowst to him, much of the anarchy is clandestine - taking place behind closed doors. I once worked for a Medical company. The owner took Canada's money, with the help of prominent Alberta politicians, and of course his own employees who helped with the scam, over to Japan and started a Japanese Medical Retail company. Isn't that just wonderful that Canadians paid lock stock and barrel for him to become rich in another country?
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Ferren
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Posted: 23/November/2007 at 6:39pm |
Your right. I pulled out my old student loan statements and checked out the math. Interest is charged on principal only!
I still hold on to those statements and my settlement letter from the collection agency. It's been 5 years now and I am still affected by my experience. Even after I paid it off I had to go through a Revenue Canada reassesement of my income taxes to explain the large interest deduction I claimed. Of course it was legitimate but still rankles. It was a very long 6 year process. I emphathize with anyone who has had to endure the unpleasant experience of collection agencies, particularly with respect to student loans. I know what it's like not to be able to get a credit card, mortgage, personal loan or credit of any kind. hard to imagine in these times of easy credit. I remember the constant banter with tricky collectors using every trick up their sleeve to get an emotional response.
But the thing I remember the most and is always in the back of my mind when I hear similar stories, is that things will get better. That is almost a certainty if you are willing to believe it. The trick is to carry on with your life during the crises and not let it impede you as you live your life and grow as a person. If you can do that then you will be truly successful in life.
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administrator
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Posted: 19/November/2007 at 6:54am |
Ferren, compound interest is not the norm... perhaps if you do cash advances on credit cards... if you use the PMT function in excel and you'll see that the payments do not use compound interest. Johnny has appropriately commented on your post.
I think that even with simple interest, the 11.5 % is way too high!
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Administrator Mark OMeara Author of Let Go and Heal: Recovery from Emotional Pain https://LaughSingWrite.com - http://bit.ly/heal2024
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SolveStudentDebt
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Posted: 19/November/2007 at 6:46am |
FYI - When the principle descends, so does the amount of interest because the interest is calculated based on the principle outstanding. There is no compounding. What you are stating is something that can spread panic among the borrowing community, Ferren.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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SolveStudentDebt
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Posted: 19/November/2007 at 2:33am |
Interest is calculated on the principle amount for a student loan, Ferren. Not the principle and amount of interest in arrears. If it were accruing interest on principle, and principle with interest to date, then it would be compounding. The daiy rate on a student loan of $10,000 does not suggest that it is a compounding rate.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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Ferren
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Posted: 17/November/2007 at 11:09pm |
Actually, compound interest is the norm in banking and financial systems. If you check out the National Student Loans Service Center (CanLearn) and test their student loan repayment calculator you will find that it is based on compound interest. This is pretty straight forward stuff.
A $10,000 loan charged 12% simple interest over 5 years would have a total payback of $16,000. Very easy to calculate. Simple to calculate the payment too. Just divide by 5 for annual or 60 for monthly. This is why they call it "simple" I suppose.
The same loan being charged compound interest would have a total payback of $18,167 assuming no payments made over the 5 years. Not quite as easy to calculate but does explain the confusion that arises when one attempts to understand how the present balance of the loan was derived.
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SolveStudentDebt
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Posted: 13/November/2007 at 12:32pm |
They earn a commission on anything they have carriage of. Collection agencies are protected, Bateman. They are also embedded within the system.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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Bateman
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Posted: 13/November/2007 at 11:04am |
So if I'm understanding you correctly a collection agency gets paid a commission on a judgement even if the judgement is never enforceable?
That is an awful policy. The only party who benefits is the collection agency. Both the lender and the borrower end up worse off.
My hope would be that these collection agencies would lose clients over time since they clearly are not acting in the client's best interest.
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SolveStudentDebt
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Posted: 13/November/2007 at 10:40am |
The motivations are described up in my previous post. Collection agencies threaten legal action, and there are certain agencies that I am aware of that follow through with it more than their competition does. Bottom line, people are being sued by collection agencies for the purpose of commission earning rather than serving the best interest of their client. Fact.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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Bateman
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Posted: 13/November/2007 at 9:25am |
So, who should be held accountable for something like this? The collection agency, their client, or both? |
It depends on the nature of the collection agency's relationship with the client.
If collection agencies accept delinquent accounts on contingency and collect a commission fee for each loan collected then it would be both.
If delinquent accounts are sold to collection agencies at a discount and then they get to keep everything they collect then it would be just the agency.
If it is against the rules to place excessive and unnecessary pressure on a debtor, how is it that legal action is allowed? |
Because no court is ever going to find that legal action is unnecessary pressure. If something is specifically allowed by legislation then the judiciary is not going to over rule that.
If a financially enabled person is flatly refusing to pay a debt, and is frustrating the system, then the action would be reasonable, yes? |
Given my current situation I'm going to pass on this one.
However, people are being sued who "appear or are made to appear" financially able when they are really not. as a result, the collection agencies will sue because they know that people FEAR LEGAL ACTION, and the associated consequences and encumberances.
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I know collection agencies threaten legal action a lot but do they actually follow though on the threat? I was under the impression most of the time it was a bluff.
Taking legal action against someone who really can't pay is fairly counterproductive. Getting a judgement is one thing but when it comes to the enforcement of that judgement if there is nothing there then they get anything.
I'm trying to figure out what the motivations would be to take this route. Maybe they think if they scare people enough they will do something desperate to get the funds. But they would only need to put on a convincing bluff for that to work. I guess if the collection agency wanted to be purely punitive then that would make sense but that is the only reason I can think of. That is kind of disturbing.
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SolveStudentDebt
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Posted: 13/November/2007 at 8:22am |
Here is something to think about:
If it is against the rules to place excessive and unnecessary pressure on a debtor, how is it that legal action is allowed? If a financially enabled person is flatly refusing to pay a debt, and is frustrating the system, then the action would be reasonable, yes? However, people are being sued who "appear or are made to appear" financially able when they are really not. as a result, the collection agencies will sue because they know that people FEAR LEGAL ACTION, and the associated consequences and encumberances.
So, who should be held accountable for something like this? The collection agency, their client, or both?
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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SolveStudentDebt
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Posted: 13/November/2007 at 8:15am |
In the states the FDCPA is rather strict, but many of the day to day breeches often go unaddressed from what I am told. Serious complaints are the ones that are treated and enforced upon. A collector having a bad day is not really addressed as agressively. In Canada, you have collection agencies' acts, which are provincially fueled and driven. The USA has a Federal statute, which certainly has much sharper teeth.
Here is something that you might want to look at:
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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Bateman
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Posted: 13/November/2007 at 8:00am |
My understanding is that in the States it is possible to extract money out of collection agencies for engaging in this type of behaviour. Is there anything similar for Canadians?
I had someone staying with me a while back who was in heavy debt. Collectors eventually found him and somehow got my number. Despite making it clear I was not the person they were looking for they revealed information to me that I felt was of a private nature.
They also told me to tell him that they had confirmed his employment which was an obvious bluff as he had been unemployed for the last 4 years. There has to be some protection against this kind of behaviour.
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SolveStudentDebt
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Posted: 13/November/2007 at 7:32am |
The threat of legal action is more saleable because thatis something that carries the element of truth and real consequence in the event they are able to do it. It is also important to remember that collectors have to sell out to their clients to get that mighty permission to sue, and in many cases, collectors lie to their clients by making the debtor out to be "combative" and unwilling to repay", regardless of the fact that the debtors are offering payments - and the collectors are simply refusing. Collectors have WAY TOO MUCH power, which can easily be abused. Here is where some of the legal energies should be aimed at. From a cultural perspective, the third-party debt collection industry is in most part biased and stereotypical towards people who owe money. From a behavioral analysis perspective, the debt collection industry behaves in most part like hyperactive children with little to no patience - and nothing seems to pacify them.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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SolveStudentDebt
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Posted: 13/November/2007 at 7:28am |
It is important to remember that collectors tell people the darndest things. They say things that tweak a certain stimuli in order to get that motivated and fearful response. Interest accrual, legal action, and exposure are the three top "psycho-tenderizing" tools they use. Collectors will say that interest compaounds but it doesn't - and a lot of borrowers do not really know for sure. Collectors will also threaten exposure, such as calling and disclosing to employers, family, friends, and creditors. These thing cause panic in the minds and hearts of student loan borrowers.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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Bateman
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Posted: 12/November/2007 at 10:23pm |
Please ignore my previous post. I was under the impression that Inexplicable had defaulted in 1998. I now re-read his post and realized it was in 1988.
Over 20 years (not the 10 as I previously though) an $11,000 loan would easily add up to $37k-9K=$28k with no compounding. In fact if it had been compounding the loan would now have a balance over $100k
bet even a regular accountant wouldn't be able to figure out how the interest is calculated unless s/he made it his/her life's passion (or got paid serious dollars to get motivated) |
I'm pretty sure anyone with a simple calculator and high school math could figure it out. Especially now that it is clear the interest is not compounded.
The only reason I was confused before was because the loans are so old. I never even registered the 88 but just read 98. The only reason I even noticed was that he said 16 years. I thought it was baffling that I have loans from 10 years ago but to have loans from almost 20 years is even more unbelievable.
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SolveStudentDebt
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Posted: 12/November/2007 at 1:02pm |
I have business relationships with three accountants who are very able to understand this sort of arithmetic. Two of them are basic and one is a forensic.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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