
35% of Americans Facing Debt Collectors - spking
http://hosted.ap.org/dynamic/stories/U/US_DEBT_STUDY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-29-00-12-33
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dools
Having your job prospects threatened because you're unable to repay a hospital
bill is the most broken, fucked up thing I've ever heard.

EDIT: Well, not the MOST broken and fucked up... but pretty fucking broken and
pretty fucking fucked up.

~~~
sneak
Services, including medical care, are not free and debts must be paid. Credit
rating agencies, as well as all reputation-reporting services, are protected
speech.

As an American, what's fucked up to me is that in some other countries, you
can actually be imprisoned for debt.

Job prospects can be threatened by many things that seem, at first glance,
like they might not be related... and that may not be a bad thing in all
cases. Let markets make their own decisions.

~~~
shawabawa3
I find it seriously scary how many Americans on the internet are totally
brainwashed into thinking the free market is the greatest thing ever and there
are absolutely no problems with it.

Medical care is not free, however in every country that has socialised
healthcare (i.e. every developed country except the us) it is free at the
point of use.

And if you're going to complain that it's more expensive because everyone's
paying out of taxes, in 2012 the US actually spent _more_ in taxes per person
than e.g. the UK on healthcare[1]

Healthcare in the US is fucked up, and free markets are not the solution to
every problem.

    
    
      [1] http://wdi.worldbank.org/table/2.15

~~~
zo1
_" Medical care is not free, however in every country that has socialised
healthcare (i.e. every developed country except the us) it is free at the
point of use."_

It's also "free at the point of use" in a free-market system. I just present
my medical aid membership card and I get whatever I need; hospital, pharmacy,
ambulance, etc. Yes, that is a present-day thing, not some fairytale future.

Not only that, but these "free-market" companies give out stuff for free
because it is profitable to keep their members healthy. _Gasp_ , benefits for
free. They sometimes send out free traffic "officers" to congested
intersections / accidents to help traffic along to prevent accidents, for non-
paying individuals. Just a small taste of what a free-market system could do
if left to its own devices.

I find it seriously scary how many People on the internet are totally
brainwashed into thinking the free market is some sort of personified evil
boogey-man and socialism is the panacea for all the world's ills. Both have
their flaws, and both have benefits. How about you let people choose what they
prefer?

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aestetix
How exactly are people supposed to pay their debt if they can't get a job
because they have debt? An employer doing a criminal background check makes
sense, a credit check far less so.

~~~
sneak
How exactly are employers supposed to trust people to be responsible with the
management of large corporate assets that weren't personally carrying adequate
maintenance contracts on their single most important asset: their person?

~~~
Evgeny
By this logic, doctors that smoke, drink or/and are overweight should be fired
- they don't properly maintain their own health, so should be disallowed to
care about others. Would that be a good idea?

~~~
sneak
I would never do business with a doctor that smoked, nor would I hire a smoker
to work in a key role in any business I had hiring authority within. It's a
fundamental failing of ability to do cost/benefit analysis.

------
yardie
As counterexample to the way Americans handle debt the way some european
countries handle debt is really fucked. Spain is going through a deep
recession (25% unemployment, even now) because you simply cannot declare
bankruptcy.

According to a friend a lot of local and international banks were quite happy
to make Spanish loans since no matter what happens the debtor has to pay. In
the US, a bad debt leaves your credit report after 7 years, and personal
bankruptcy after 10 years. Since there is no financial reset button in Spain
all the bad shit that happened in 2009 is still making waves 5 years later.
The worst affected, small business owners, committed suicide or self-
immolation realizing they had no escape and no future.

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skrebbel
I'm seriously wondering when/how this thing is going to blow. Debt is such a
central part of everything American, and it's completely not sustainable.
What's going to happen? Another credit crisis? Revolution? Mass evictions?
Nothing?

~~~
deciplex
Nothing. The American ruling class commands the most sophisticated propaganda
apparatus ever seen in human history. Americans will be ground into dust and
then they'll blame themselves for it.

~~~
sneak
It's happening now. I've been in California for a while, the state with the
highest taxes, fastest growing companies, and largest population: people are
sleeping in the streets like it's the third world. I understand it's just as
bad in New York (where I used to live), just much less visible due to climate.

It seems to get steadily worse over time. I believe that the median resident's
quality of life in this country is steadily falling in a lot of ways. The
things that people used to believe made this country great (e.g. the first
half of the 20th century) are today historical anomalies, completely foreign
to the ages that came before and after.

The age of American exceptionalism is over and it's turning into just another
place where everyone's backward and suffering.

~~~
eli_gottlieb
"The things that people used to believe made this country great" mostly took
place in the _second_ half of the 20th century, in the post-war boom period.

Look, all across Europe there are economic problems, but America (and to a
lesser extent the UK) is the only country that's actually just scrapping large
parts of its own landmass into Third World substates.

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valdiorn
As a non-american I cannot understand why debt would hurt your job prospects.
Can anyone clarify?

~~~
techsupporter
Payment or non-payment (overwhelmingly non-payment+) of debt is reported to
credit reporting agencies. Employers, as part of an employment decision, are
allowed by law to pull copies of credit reports. A poor credit report tends to
be treated by many employers as an indication of the candidate being a poor
hire so the candidate is rejected.

\+ Noted because many sources of negative marks on a credit report (like a
utility bill, mobile phone account, rent-to-own store, apartment lease, and so
on) only report negative actions. If a person never pays late, the business
doesn't report the favorable upside.

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BigChiefSmokem
I guess the trick is how can we to allow for capital infusion for growing
companies while at the same time keeping the populace safe from predatory
"financial products" and other chicanery which have been solely and purposeful
over-designed to be unnecessarily complex, so as to enslave a (financially and
mathematically) uneducated populace via illogical financial terms - mostly by
people who do very little each day besides striving to find ways to assert
their control over others.

i.e. the difference between a real, and progressive VC environment and just
another Wall Street magic trick

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avz
I'm genuinely puzzled by the central importance of debt in the lives of
Americans (reflected for example in the importance of the infamous credit
score which is something my country also has, but which barely anyone cares
about).

Imagine you'd like to buy something you don't have enough cash to pay up
front. Assuming you're not in immediate necessity, you're faced with the
choice of saving up the money and delaying the purchase or borrowing the money
and buying now. If you delay the purchase you can invest or lend the money and
earn capital gains or charge interest. If you buy now you have to pay the
interest to someone else. This means the ultimate amount you spend is lower if
you delay the purchase (your savings are augmented with capital gains or
charged interest and you avoid paying the interest to someone else). The
upshot seems to me that unless you're buying something out of immediate
necessity you are better off delaying the purchase.

Is the central role of debt due to the fact that most shopping done in the US
is done out of immediate necessity (which may suggest wide-spread poverty) or
is it simply wide-spread impatience or somethings entirely different or more
complex?

~~~
zo1
I think it's just a lack of education, and it's not limited to the US, mind
you. People seem to have this belief that credit is free money that they can
delegate to the future. Since the detriment is deferred, people don't really
examine it for face value. There's that, and most are really bad at
visualizing debt.

I recently watched a documentary about the state of debt in the UK. It was
quite shocking, normal regular people that got addicted to debt, and just
spent, spent, and spent. Meanwhile, the banks kept rewarding their "debt" with
higher limits and more fresh cards. These people took out ridiculous sums of
money, sums that they need to spend probably decades paying off simply because
their salaries are so low.

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kghose
However, statistics can be misleading if not filtered.

I am proud to say, I am part of this 35%. I have owed $15 to a hospital for a
long time. I also owed a bigger bill for a long time. Despite having the
money. We moved, lost track of correspondence, had life happen to us etc.

I'm not sure, however, which employers reject you on such bases. When I worked
at a hospital, we had background checks. At my present job, no such thing.

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johnebgd
Looks like the debt issue in the U.S. is systemic within the general
population and not isolated to the U.S. government.

~~~
ExpiredLink
Get it now, pay later. What could be wrong?

~~~
watwut
Keep in mind that most personal bankruptcies are caused by medical bills. You
can not exactly postpone critical operation until you save money. You can not
work while you are sick a lot. And medical prices are non-transparent, patient
have no idea which tests/interventions are needed and which are not, so it is
hard to price shopping even if you have time for it.

If 35% percent of population do something, then it is better to look for
structural reasons other then "population is stupid" simplification.

~~~
zo1
Why does there have to be a "structural reason" for it? Why must there be
external blame assigned to something simply because it is commonplace in a
population group? I'm curious what arbitrary line you've drawn that lets you
delineate between "common-place in the population" vs "due to structural
reasons"?

Note how I don't use the phrase "population is stupid", or that the reason is
"stupidity". It could be a whole host/variety of reasons for people choosing
to ignore possible life events. Everything from a misguided belief in a non-
existent "safety-net", conscious decision to accept the risk, or plain not
even remotely foreseeable life-altering event. Somehow, I doubt 35% falls
under "unforeseeable".

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mseebach
What exactly does it mean to have "debt in collection"? It seems to be a
binary state, if so, what are the exact parameters for entering and exiting?

~~~
techsupporter
In practice, it means any debt where the original holder of the debt has
determined that it is unlikely to receive payment from the debtor so the right
to collect the debt is sold to a third party.

An example: Bob takes out a credit card with a limit of $500 and charges $300
to it. Bob makes no payments. After three months (90 days), interest, late
fees, and so on have pushed the total debt to $620 and Bob's credit card
issuer decides that Bob is unlikely to pay. The debt is sold to a collection
agency and is written off as a bad debt on the books of the credit card
company. The collection agency pays $20 for the debt (so low because Bob is,
through external methods, deemed to be unlikely to pay any debts, much less an
unsecured credit card) and now hassles Bob for the next several years.

At the point that the debt was sold is when most people consider it to be "in
collections." You exit collections by paying the debt.

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lqdc13
A good portion of it might be with people simply forgetting to pay bills
and/or not caring.

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eddd
This is result of QE. Cheep money doesn't solve problems.

