ntt@dciem.UUCP (Mark Brader) (12/20/83)
These are, I suppose, to be distinguished from people who deal with a business expecting it to become bankrupt and themselves to become creditors...
dave@utcsrgv.UUCP (Dave Sherman) (12/20/83)
From: ntt@dciem.UUCP (Mark Brader): -- These are, I suppose, to be distinguished from people who deal with -- a business expecting it to become bankrupt and themselves to become -- creditors... That's why secured creditors take security. The point is that certain creditors are in a position to expect to become creditors of a bankrupt, and they can protect themselves with various kinds of security - an option not usually available to the consumer. Dave Sherman -- {allegra,cornell,decvax,ihnp4,linus,utzoo}!utcsrgv!dave
warren@ihnss.UUCP (Warren Montgomery) (12/21/83)
My original posting on this subject has generated some interesting discussion. I would like to contribute a couple of points. 1) In some business transactions, one side or the other extends credit, in the form of advance payment or reciept of goods or services before payment. This is typical commerce, and companies make allowances for bad accounts in their procedures. They get tax benefits for bad debts and in some cases insure against them. The credit extension is a conscious decision, and a factor in deciding to go ahead with a transaction. (Some companies will not deal with some suppliers because they are poor credit risks. In many consumer transactions, no credit is consciously extended. There is a simple exchange of cash for goods. The credit worthiness of the customer or the business doesn't figure in the transaction. My complaint is that somehow, just because the exchange took place by mail, my payment which was supposed to be immediately exchanged for merchandise was considered as extension of credit to the merchant. In my mind, any other use of that money (such as deposit in general account, use for payment of others) is really theft by the merchant. The law should allow for exchange of cash for merchandise with niether side becoming creditors. This ought to apply to the airplane purchaser mentioned in one of the followups as well, The purchaser in good faith exchanged cash for the airplane and presumably had no interest in extending credit to the merchant. If the sale was legal, I don't see why the law should make the purchaser responsible for the merchant's unpaid debts. Maybe the real problem is that it is too easy to declare bankrupcy and nobody seems to be responsible for the unpaid debt. Given that, however, I would think that the intention would be to limit the number of people at risk from bankrupcy. Again, thanks for the interesting news discussion. -- Warren Montgomery ihnss!warren IH x2494
rh@mit-eddie.UUCP (Randy Haskins) (01/02/84)
About the difference between mail-order and buying something from a store... The problem is, as always in this world, that possession is 9/10's of ownership. When you walk out of a store carrying what you just bought, then you have it. It is more difficult to take something away from someone than it is to not give it to them in the first place. -- Randwulf (Randy Haskins); Path= genrad!mit-eddie!rh
jbn@wdl1.UUCP (John B. Nagle) (01/05/84)
Discovering that one is a creditor of a bankrupt entity is always annoying. Using an intermediary sometimes makes it possible to avoid a timing window during which a bankruptcy can be costly to you. For big deals, there are trust companies. For small transactions, credit cards are useful. So are C.O.D. orders via United Parcel.