Need to Stop Paying my Credit Cards in the UK - Will I get away with it ?

[Harpodom]

I have never called him a thief, as I have said, I know if its not fraud and its not Government Debt its his choice but to say its the banks fault in America for lending more money than people can afford is ridiculous. If the couples who "They gave $300,000 mortgages to people making $20k " had no brain or were children you could understand but as adults we all know whether we can afford it or not! Some poor people end up in debt through no fault of their own, illness divorce or losing their jobs, but borrowing for a mortgage they just cant afford, that is just plane greed pure and simple. I want a jetski and a boat and lots of Jimmy Choos in my wardrobe oh I know I will just go and get a credit card and buy them, I wont bother saving up because I might just not bother paying back that credit card as its will be a business decision!!! Greed that outweighs any common sense and that is what caused the GFC people borrowing what they could not afford and the rest of the world is now suffering from the stupid idiotic greed, by banks companies and individuals with the attitude that this is a business decision! Oh and banks dont just GIVE credit away, in my experience you have to actually apply for it??? or agree to an increase???

 

no it's not ridiculous. I agree people were naive, sometimes stupid and probably greedy.

But the banks played their part, giving out dodgy mortgages to people they presumably knew weren't able to pay back, then selling on their debt to overseas banks. Stupidity all round.

[Que Sera Sera]

Sorry that should have read to say Its ONLY the banks fault is ridiculous you are right.:embarrassed:

Edited March 20, 2012 by Que Sera, Sera

[Graemsay]

Having read through the thread, it strikes me that ScotInOz's options are:

1. Sell the house and use the proceeds to repay the credit card debt.
   
2. Re-mortgage the house and use equity withdrawal to repay the debt.
   
3. Sell the house, transfer the proceeds to Australia, and then default on the credit card debt.
   
4. Keep the house, and default on the credit card debt.
   
5. Take out a loan in Australia, pay back the credit cards, and stop running up debt.
   

Of these, I prefer the first option. UK property is still extremely expensive on historical measures, and at some point (probably when interest rates rise from their lows) prices could fall significantly. So it would be a way of locking in any price gains prior to 2008, and meeting the obligations to the debts taken out.

 

The second option only makes sense if the enlarged mortgage is paid down quickly, otherwise the interest over 25 years will be expensive. That said, the interest payments on £40K of credit card debt must be between £6K and £8K per annum.

 

The problem with the first and second options is that the house could be worth substantially less than Scot thinks. There's a body of research suggesting that homeowners value their property at 10% to 20% more than its market value. And even if the estimate is correct, it might be difficult to sell or re-mortgage in the current financial climate.

 

If you want to default on the debt then option three is going to be the safest, as there won't be any significant assets left in the UK.

 

The fourth option appears to be Scot's favoured choice, and it's very much a "have your cake and eat it" scenario. He retains the house as an appreciating (hopefully) asset, gets rid of the pesky credit card debt, putting him ahead by a significant amount.

 

This only works if events follow the happy path. If the credit card companies put a charge on the house, and for £40K it would be well worth their lawyers' fees to chase this. Since he's not currently living there, it can't be argued to be his home any longer, and it'd lose any protection that it might have done if he'd remained in the UK.

 

The risk here would be that there's a forced sale, at a discount to market value, which doesn't cover all the debts accrued. In which case there'd be no asset but liabilities outstanding.

 

The trouble with three and four is that they effectively burn Scot's bridges with the UK. If things change, and life has a habit of giving you nasty surprises, then he'd be facing significant debts plus interest on his return.

 

I'd also look very carefully into the law surrounding CCJs. On the one hand, I don't think that they can be awarded when the offending party is overseas. On the other, there are reciprocal agreements allowing them to be enforced in Australia. (Please note, I am not a lawyer, nor do I play one on TV.)

 

I've thrown in the fifth option since no-one else has mentioned it. The Pound is at historic lows against the Aussie Dollar, so Scot could take advantage of that to reduce his liabilities. £40K is currently around $60K, but could rise to $80K to $100K if the exchange rate returned to its previous level. Plus he'd get a better FX rate from a large transfer, and the interest rate on the loan would be lower than that on his credit card.

 

Edited to add: There's a long thread on another board that I found when Googling this. Might be worth a look.

Edited March 20, 2012 by Graemsay

[Guest GeorgeD]

The second option only makes sense if the enlarged mortgage is paid down quickly, otherwise the interest over 25 years will be expensive. That said, the interest payments on £40K of credit card debt must be between £6K and £8K per annum.

 

The key to cashing in the mortgage equity is that some or all of the interest payments can be offset against Australian tax if the hosue is being rented. Rather than using his own money to pay the interest, use money he is paying in Australian tax to pay for some or all of it.

 

Interesting Option 5. Play the currency markets. Now's the time to do it, but as we all know, rates can go down as well as up!

[Guest Andy]

Great debate folks !

 

I get the emotion and the focus on me being morally unfit... I really do but no need to get personal ! I did expect a spectrum of views and it's really interesting that the posters are the one's on the moral high horse. Many more have PM'd me with advice and guidance as they've done the same thing or have been in a similar position.

 

The most logical post yet in my view has been HMSMARK. This is how I see it .... no emotions ... no morals .... simply a strategic decision to ensure my family are not impacted and we stay in the best possible financial position.

 

Let the debate continue !

 

Scot

 

Of course the most logical post yet was from HMSMARK because that is what you wanted to hear, you did not want to hear anyone being disgusted by your proposed actions and when you did you then accused them of being on a moral high horse, pathetic. You carry on and make a simple strategic decision where your family are not impacted and you stay in the best possible financial position :nah:, maybe if you had thought about that before you would not be in the position you are in now, like i said before you have borrowed the money and a lot of that judging by the amount has probably been for luxuries so you should set a good example to your children and pay it back even if it is £20 a week, however i reckon you have made your decision already and have no intention of doing that, well done, like others have said, you have nicked 40k and got away with it.

[chalkyhill]

No matter how much bank/business bashing you put onto it, you are still nothing more than a thief.

 

You have the ability to pay back the debt, yet you are choosing not to - this isn't anything clever its just simple fraud.

 

In the end, I hope it all catches up with you.

[TheGrahams]

The thing I think is the most sad about all of this what his children are learning from all of this; thats its ok to rack up debt and then run from it because its the banks fault!

 

Heaven forbid you actually teach your kids that money doesn't grow on trees!

[Guest truebeliver]

seriously! yous need to step down off your soap boxes!!!!!!!!

 

i agree with kimanda living a bit of a high life (as in one you cant afford) will have something to do with it and creditcard companys and banks should take some blame, the way they lend money out is a joke and this kind of borrowing can cripple people financialy

 

i was in deb***ams the other day and the lady asked me if i would like to try for a store card and get 20% of my purchase " why not" i thought, she told me i would recieve points/vouchers and i could pay immediatly after using the card with cash but i would reep the benifits of having this card, great!

 

turns out it was actually a credit card with a £1500 limit, and i could use it everywhere!!!!!!! for anything my heart desires at an interest rate of 29%!!!!!!!

 

i am someone who dosent borrow unless i can afford it but they are literally giving you these things without you even asking i can see how it would easily spiral

 

and 2tigers i am 100% offended by what you have said, my children do not have a "sad upbringing" or some of the other awful things you said, they will be taught the value of money and how to be sensible with it, i personally dont live in an episode of "little house on the praire" i live in the real world where you have to look out for your families interests whatever/whichever way that might be.

 

dawn x

[WeegieDave]

Is this thread still going?? I can see a few fall outs developing over the course of it! The sooner this one ends the better I think! :biggrin:

[Harpodom]

I'd like to say this, "let he who is without stones, cast the first sin"...that doesn't sound right.

 

wait a minute, "let he who is without credit, cast the first..." no, that's not right either.

 

Here we go, "let he who is without 0% finance, be able to put it on lay by"....that's it!

[Guest Shell15]

Morals and the like keep being bought into this but surely along with 'good morals' comes empathy, kindness, sympathy..all of which i have seen none of with some of the self righteous comments of some. I canno believe that those claiming the moral high ground are also those wishing bad things on the poor man and his family.. I find that just as bad as what you are accusing him of and actually worst. I didn't know the verse 'Love thy neighbour' came with terms and conditions like 'but only if they do non of the following...?? Its pathetic how some people can be so ignorant. I joined PIO to find out the cost of shipping and general info about Australia, but since commenting on this thread I have been accused of being a liar, dishonest, a thief, and having contacts with most of the criminal world (a bit of an exaggeration but you know what i mean) this is just ridiculous, and highly offensive. ScotinOz came on here to ask a simple question and to be honest I think only a few comments have actually answered that, apart from the rare decent and kind comments wishing the family well..the rest of you have just got enjoyment out of slagging him and his family off. Its a disgrace and very disappointing because there is so much good advice on here...

Edited March 20, 2012 by Shell15

[Guest truebeliver]

dave i promise you im not falling out with anyone :yes:

 

in my posts on here (until most recent) ive not offended anyone or suggested that my way is the only way

2tigers has said some seriously harsh things thats all

 

anyway happy days :biggrin: i love a good debate lol

 

dawn x

[pintpot]

I canno believe that those claiming the moral high ground are also those wishing bad things on the poor man and his family..

 

He's not a poor man. He hasn't fallen on hard times due to being cheated, or through grave misfortune or hard luck. He's just borrowed a load of money - which he probably didn't even need to borrow - and doesn't want to pay it back. Even though he actually has assets that mean he probably can

 

If we were talking about someone with no assets or reasonable way of paying back debts that had been unavoidably incurred through misfortune - bereavement, redundancy, family illness, whatever - and the servicing of those debts was crushing them to the extent they couldn't see another way out, then you'd have a point. But we're not. The only "bad things" I see people wishing on him are that this proposed crime should catch up with him and he should face the consequences. The crime is, of course, completely unnecessary, it's just being proposed out of greed. And you think we should have sympathy with that? That's some screwed up moral framework

Edited March 20, 2012 by pintpot

[WeegieDave]

dave i promise you im not falling out with anyone :yes:

 

in my posts on here (until most recent) ive not offended anyone or suggested that my way is the only way

2tigers has said some seriously harsh things thats all

 

anyway happy days :biggrin: i love a good debate lol

 

dawn x

 

Good. We could arrange a charity boxing match for all those at war on this thread... Proceeds go to ScotIzOz :laugh:

[Guest Shell15]

That's some screwed up moral framework

LOL!!! If you say so...:wink:

[Guest truebeliver]

pintpot,

 

how do you know he or his family hasnt suffered some of the above during his "borrowing"????????

 

nobody is asking you for sympathy just maybe not to be so judgemental

 

dawn x

[AJ]

Good. We could arrange a charity boxing match for all those at war on this thread... Proceeds go to ScotIzOz :laugh:

 

Think hes managing to gather plenty "proceeds" on his own. Maybe he will have a change of heart, pay of his debts with his house money and give the other 20,000 to some one who really needs it - my ar*e!!

[pintpot]

pintpot,

 

how do you know he or his family hasnt suffered some of the above during his "borrowing"????????

 

nobody is asking you for sympathy just maybe not to be so judgemental

 

dawn x

 

Because we've already been told he's paying $900 a week rent. Even in Sydney, no one *has* to spend that much. There are places for half the money that are perfectly decent family homes in decent areas. So that's about $2K a month in unnecessary spend, $24K a year. If that were reassigned elsewhere the dents would rapidly diminish (or not have been run up in the first place)

 

I'm being judgemental because the OP is by his own admission wanting to do something that's basically theft. And from what little we know, that theft is completely unnecessary as a) the debts probably never needed to be racked up like that in the first place, and b) he has the money to pay them off anyway

 

It's not complicated

[Harpodom]

pintpot,

 

how do you know he or his family hasnt suffered some of the above during his "borrowing"????????

 

nobody is asking you for sympathy just maybe not to be so judgemental

 

dawn x

 

If he posts on a public forum asking advice, he's gonna get a whole range of responses to such an emotive issue.

 

I do agree though, people are very quick to judge others and in doing so give some rather damning pronouncements. That's human nature I suppose: people like to assume they themselves are blameless but more than happy to stick the boot in to others.

 

 

Jesus would be turning in his grave right now.

 

 

 

....'ang on a sec....

[Guest Shell15]

Because we've already been told he's paying $900 a week rent.

 

I am slightly concerned how anyone would have any info on him, unless they knew him personally, as he has said he has kept himself anonymous for those reasons...unless of course they had access to such info? I am genuinely interested in your comment, because I saw the comment your referring to and it did make me wonder??

[pintpot]

I did wonder that myself.....but even if incorrect, as he can actually pay the debt off (if he sells the house), the proposed crime is completely unnecessary and therefore morally unacceptable

[Guest The Pom Queen]

I am slightly concerned how anyone would have any info on him, unless they knew him personally, as he has said he has kept himself anonymous for those reasons...unless of course they had access to such info? I am genuinely interested in your comment, because I saw the comment your referring to and it did make me wonder??

Because we see duplicate accounts so know what has been posted previously.

[Guest The Pom Queen]

Ok everyone this thread is going around in circles so I am going to close it now. I will contact the op and ask if they want this account deleting.

Thank you for all your comments and I'm sure it has given the op a lot to think about.

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