eder@ssc-vax.UUCP (Dani Eder) (12/22/84)
> Suppose I owe you $1,000 and refuse to pay. You decide to use > force to collect your debt, so you send your police to my house to > force me to pay up. They are met by a squad of MY police who > say that they do not recognize the legitimacy of your claim. > > Result: gang warfare. It might be instructive to see what happens today: I owe you (you being a local business, like a furniture store) some money and refuse to pay. After deciding it is a bad debt, you can turn it over to a collection agency. They will send letters and telephone and generally pester me until I either pay up or they too decide it is a bad debt. You now report me to a credit reporting firm, who lists me as a bad credit risk. I now find it very difficult to borrow money from anyone. If they are willing to lend to me, it will be at much higher rates, or they will demand something of value as security (like pawn shops do). In any case the cost of credit for me goes way up. There is no need for force, and no need for government intervention. In fact, as has happened to many people, you can be turned down for a loan by having an insufficient credit record. You could be a perfect angel, but until you prove youself reliable to the lender, you won't get that loan in the first place. Now, if you lent me the money without checking my credit references, and without requireing security for the loan, you took an awfully big risk. If I turn out to be a bad borrower, hiring thugs is not an appropriate response. Learning to be more cautious in lending is. Dani Eder / Boeing Aerospace Company / uw-beaver!ssc-vax!eder
ark@alice.UUCP (Andrew Koenig) (12/23/84)
>> = me > = Dani Eder = me again >> Suppose I owe you $1,000 and refuse to pay. You decide to use >> force to collect your debt, so you send your police to my house to >> force me to pay up. They are met by a squad of MY police who >> say that they do not recognize the legitimacy of your claim. >> >> Result: gang warfare. > > It might be instructive to see what happens today: I owe you > (you being a local business, like a furniture store) some money and > refuse to pay. After deciding it is a bad debt, you can turn it over > to a collection agency. They will send letters and telephone and > generally pester me until I either pay up or they too decide it is > a bad debt. You now report me to a credit reporting firm, who lists > me as a bad credit risk. I now find it very difficult to borrow money > from anyone. If they are willing to lend to me, it will be at much > higher rates, or they will demand something of value as security > (like pawn shops do). In any case the cost of credit for me goes way > up. > There is no need for force, and no need for government intervention. > In fact, as has happened to many people, you can be turned down for > a loan by having an insufficient credit record. You could be a > perfect angel, but until you prove youself reliable to the lender, > you won't get that loan in the first place. > Now, if you lent me the money without checking my credit > references, and without requireing security for the loan, you took > an awfully big risk. If I turn out to be a bad borrower, hiring > thugs is not an appropriate response. Learning to be more cautious > in lending is. You didn't carry it quite far enough. Today, if the amount of money involved is big enough to be worth the trouble, the person to whom you owe the money will haul you into court and force you to pay. This force might take the form of physically removing some of your property from your possession and selling it to clear the debt, forcing your employer to turn part of your salary over to them, and so on. The only reason they don't bother to do that for small debts is that it would cost them more than it's worth. Do you think anyone would be foolish enough to lend $100,000 for someone to buy a house if they did not have the legal right to take posession of the house if the debt went unpaid?
faustus@ucbcad.UUCP (12/23/84)
> > Suppose I owe you $1,000 and refuse to pay. You decide to use > > force to collect your debt, so you send your police to my house to > > force me to pay up. They are met by a squad of MY police who > > say that they do not recognize the legitimacy of your claim. > > > > Result: gang warfare. > > It might be instructive to see what happens today: I owe you > (you being a local business, like a furniture store) some money and > refuse to pay. After deciding it is a bad debt, you can turn it over > to a collection agency. They will send letters and telephone and > generally pester me until I either pay up or they too decide it is > a bad debt. You now report me to a credit reporting firm, who lists > me as a bad credit risk. I now find it very difficult to borrow money > from anyone. If they are willing to lend to me, it will be at much > higher rates, or they will demand something of value as security > (like pawn shops do). In any case the cost of credit for me goes way > up. > There is no need for force, and no need for government intervention. > In fact, as has happened to many people, you can be turned down for > a loan by having an insufficient credit record. You could be a > perfect angel, but until you prove youself reliable to the lender, > you won't get that loan in the first place. > Now, if you lent me the money without checking my credit > references, and without requireing security for the loan, you took > an awfully big risk. If I turn out to be a bad borrower, hiring > thugs is not an appropriate response. Learning to be more cautious > in lending is. I haven't been involved in any bad debts (on either end), so I may be wrong, but if I had a bad debt I would fully expect to be taken to small claims court and be told that I had to pay off the debt, assuming I hadn't declared bankruptcy. Maybe some people who have experience with the way that collection agencies work can say how well these agencies would work without government help... I suspect that it would be a lot easier to pull off identity changes and create fake backgrounds without government enforcement of fraud laws. Wayne