<p>The gist: big bad bank put a gun to Mr. McClellands head and made him spend money on that hideous rocking chair. Now he’s telling the bank to either take 50% off of the outstanding balance or they’ll never see a dime from him.</p>
<p>The consequence: your tax dollars paid for half of his chair.</p>
<p>The moral: The Times REALLY like these type of people.</p>
<p>middsmith, I didn’t think this Times article indicated that they “REALLY like these type of people”. I got the impression the writer might have been just as appalled as I was.</p>
<p>What really makes this hard to take is that two months ago the stamp fell off the envelope containing my credit card payment and by the time the postal service returned it to me and I re-mailed it, the payment was ONE day late, resulting in a late fee, interest on the total and a revised (upward, of course) interest rate. Yet they let this clown, and others, pay half of their balance and wave good-bye? I can only assume this sort of thing does indeed affect one’s credit rating.</p>
<p>Because of the bad economy, collection agencies won’t pay much more than 5 cents on the dollar for old debt. If the debt is old, and the credit card company could get 35 or 50 cents on the dollar for it from the deadbeat cardholder, they’d jump at it. </p>
<p>It just makes credit more expensive for the ones who aren’t deadbeats…</p>
<p>I wonder how much of this forgiven debt was principal, and how much was interest and fees. In a typical consumer bankruptcy, the debtor has already paid at least the amount of the principal.</p>
<p>This kind of thing has been going on for years. A friend of mine, who closed her business in 2001, negotiated $26000 in credit card bills down to $7000. The alternative was bankruptcy.</p>
<p>So, a free loan for a couple of years or more? It really doesn’t make it OK in my book that the deadbeat has paid the principal, but nothing more. Somebody else is paying for the free use of that money.</p>
<p>A few years ago my mother dug herself into one of these appalling credit card holes. My siblings and I spent a couple of years paying off her debts. We just had no idea she could call up and say, “Sorry guys, I just don’t have the money to undo this mess.”</p>
<p>It doesn’t have to make it OK. But it does change the picture, and it would mean that tax dollars didn’t pay for “half of his chair.” It would mean, at most, that he got a subsidized loan. That’s still a gift, but it’s not the same thing. Never mind the possibility that he’s paid back the principal several times over, as many bankruptcy debtors do over the course of years. It doesn’t make sense to generalize that everyone’s a deadbeat without the facts. Some people threw a party with free money, but that isn’t everyone.</p>
Technically, tax dollars paid for the entire chair. He only paid the interests to be able to rock that chair for the past few years. Look at your morgage, isn’t what you are paying now mostly interest? Doesn’t matter how you look at it, tax payers are paying the 50%. It’s a zero sum game; something’s gotta give.</p>
<p>I don’t have a lot to work with. The chair and the smug on his face are the only two remarkable things about the picture. But smugness doesn’t cost money.</p>