I am quite bewildered at why there has been no comments from the media or anywhere else at the impossible task for a debtor (Greece) to successfully negotiate a fair settlement with their creditors (European Union). I mean, the last time the debtor (Greece) had difficulty paying its creditors (the EU), the entire country (Greece) was in turmoil as a direct result of the harsh repayment terms from the previous loan.

This time, the President of Greece was brought before what looked like a gladiator arena lined with angry creditors yelling, belittling, humiliating and demanding what probably will turn out to be a pound of flesh.

This behaviour reminded me of the creditor meetings in a bankruptcy in the past where the debtor and their assets would be carved up into little pieces and punished to the full extent of the bankruptcy law. Sometimes it would be a single mother on social assistance or a student loan debtor being subjected to angry creditors who wanted to inflict pain and suffering onto the debtor. That ultimately, was more important to some creditors, more satisfying, than a realistic repayment plan that would help both the insolvent debtor and the creditors avoid a bankruptcy.

The difference in the comparison between individuals and an insolvent country above is that the insolvent person was shielded by a mediator like a bankruptcy trustee who had the authority to broker a fair and realistic deal to keep both the debtor and creditor out of bankruptcy, or pull the plug and end the negotiations for everyone if no agreement could be reached.

I don’t know why the European Union countries do not understood the rules of bankruptcy and the prudence of having a neutral third party – some agent from a country like the US or Canada skilled in corporate insolvencies – to review the circumstances and make recommendations that would benefit both the debtor and the creditors.

After subjecting Greece to angry and at times insulting reprimand by some creditors, an announcement was made today that harsh new conditions would be imposed on Athens in return for it to be allowed to keep the euro as its currency and avoid total economic collapse.

It looks like the irresponsible debtor has been blamed for all of the economic ills and the creditor has done nothing wrong. It even appears that the creditors are doing a big favour for the debtor by lending a further 86 billion euros in fresh loans on top of the 323 billion euros it has received from two previous bailouts.

What hasn’t been mentioned is how realistic the new reforms for debt repayment are and how a nation of individuals and families are being punished for everything that has gone wrong in the past. What hasn’t been mentioned is that both the debtor and creditor benefit from a solution outside of a bankruptcy, not just the debtor.

Essentially, it looks like Greece will be treated like a company in receivership. Assets will be sold for the benefit of creditors to pay down debt - Greece will be required to sell off public companies and property worth 50 billion euros. What could be labeled the creditor appointed receiver, Eurocrats and IMF officials, will be put into a position to ensure compliance with the creditor’s demands.

What troubles me is how creditors’ rights from foreign countries can transcend democratically elected parliaments and how the creditor can seize public property for the repayment of creditors.

As mentioned above, the debtor was all alone in a colosseum full of angry creditors, some wanting to punish the debtor, some wanting an economic death penalty-all creditors acting in the best interest of themselves without any consideration for the debtor, the individuals and families, the historical circumstances that caused the economic crisis or the viability of the demands being made for repayment.

The debtor had no chance. The debtor was outnumbered. As reported in the Vancouver Sun, one Greek businessman lamented, “Basically, we’re being told to sign everything. Whether we agree or not, I only know that I will be paying for this today, tomorrow and for many years. I don’t know whether to laugh or cry.”

It seems to me that the cure may kill the patient. Perhaps more troubling. Nobody sees anything wrong with a creditor doing whatever it has to do to collect its debts. That is a big step back in history. Debtor’s prisons are not far behind.

This certainly qualifies as a Greek tragedy.

Today there is good and bad news.

The good news came from a StatsCan report about all of the household debt in Canada that many  experts have been complaining about – how Canadians have been accused of being bad money managers but guess what? This report confirms that we are not broke and precariously dangling from a cliff of troublesome household debt, but quite the opposite. Canadians have significant assets to back all of the debt – and more. There is a net-worth surplus.

As published recently by the Vancouver Sun, a former chief economic analyst for Stats Can, Philip Cross, revealed that two-thirds of the $1.8 trillion in household debt were mortgages.

Finally someone agrees with what I’ve been saying for many years.

Recently an article in the Vancouver Sun got my blood boiling.

It was a story about a man in St. Catherines Ontario who lost his home, his car and many of his possessions. A fraudster emptied his bank account, mortgaged his home and in total stole $200,00 leaving the senior with $20 to his name. Although they could not provide any details, the police called it the worst case of elder abuse they had ever seen.

It seems that the fraudster was someone the senior knew and trusted – an employee of the credit union where he banked.

Abuse generally and financial abuse in particular against seniors often go undetected or unreported.  A press release posted a few years ago by the BC Association of Community Response Team’s  gave an unforgettable example of financial abuse against seniors:

 “I’m 91. Once I was an educator, and had a decent life. What I am today? An abused senior. Oh, please don’t tell anyone. If my kids find out I’ve been talking, there’ll be hell to pay. I don’t  want them to get into trouble. Everyday it gets worse—last month I had $300,000 in savings. Now there’s only $5000 left. It’s so hard to say NO to them. They yell and use the F word. I don’t know where they learned to talk like that. I’m so ashamed.”

 I thought I might share a few tips about how seniors can protect themselves.

1. If  you feel pressured or uncomfortable - hang up the phone.

2. 4. Never send money or give your credit card, account number or social security number to an unfamiliar party. Wait till you have received written material about any offer or charity.

5. Lock your Mailbox.

6. Have any contracts reviewed by a trusted professional on your side before signing anything.

7. Take your time making any financial decision.

8. When out, leave your purse, wallet, credit cards, and identification home whenever possible. Carry little cash.

9. Don't leave your purse in a shopping cart unattended for even a moment - including while you are loading packages

10. Arrange for government and pension checks to be directly deposited to your bank.

11. Examine your credit card bills and account balances to look for unauthorized charges or withdrawals.

12. Use a shredder to dispose of documents containing private information and pre-approved credit card offers.

13. Be stingy with information if someone calls or sends you an unsolicited e-mail.

14. Avoid strange ATM's.

15. Add password protections to your bank and brokerage accounts.

16. Monitor your credit report.

17. Enroll in an identity theft protection and restoration program

Danger Signals for Financial Abuse

  • Sudden removal of large sums of money from a bank account
  • Inability to pay bills, buy food or personal care items
  • Fear or anxiety when discussing finances
  • Visits by a family member only when check arrives
  • Inaccurate or lack of knowledge of personal finances
  • Unexpected revision of a will, or sudden sale of property

How can I Prevent Becoming a Victim of Financial Abuse?

  • Maintain a network of friends and acquaintances
  • Learn to recognize the signs of abuse
  • Be informed of personal assets, including property, bank accounts and possessions
  • Keep money in a bank, not in your home
  • Have pension checks deposited directly into bank account
  • Have Written repayment agreement before lending

The Better Business Bureau publishes a top ten list of scams to watch out for. Here is their most recent list.

1. Top Auto Scam - Automotive Online Pricing 
2. Top Emotional Scam - Disaster Charity Fraud 
3. Top Identity Theft - Remote Computer Repair 
4. Top Social Media Scam - Fake Facebook Friend Request 
5. Top Romance Scam – Catphishing/Online Dating scam 
6. Top Utilities Scam – Fake Billing 
7. Top Finance Scam - Online Affinity Fraud 
8. Top Sales Scam - Redirected Robocalls 
9. Top Big Data Scam - Big Box Breach 
10. Top Ad Scam - Fake Online Reviews

For further information go to http://www.bbb.org/mbc/bbb-top-10-scams/

December 9, 2014

By Margaret H. Johnson

A good friend of mine, Michael Gillette, a renowned guitarist and teacher, gave me a great Christmas CD of traditional music with a delicious new flavour. Only two instruments play – a flute and acoustic guitar – that reinvigorate the classics with lively nuances and brilliant flurries.

An added feature to their vivacious touch makes this tribute to Christmas fresh: the songs are short. They are mindful the audience already knows the melodies. So, rather than keep repeating the refrains and verses they serve up tasty appetizers that bring back all of the joyful memories in exactly the right portions - just enough to bring a smile to your face.

Behold, judgement day is upon us, or more accurately, money judgement day.

When I first looked at the new law being proposed in BC about money judgements I almost cried. It’s terrifying to see how many bad things can happen to people if they should have serious debt problems. They even use the word execution.

Money judgements are the second last step in the collection of debts before the final solution for an impossible debt problem, a bankruptcy. Creditors must go to court, first, to get what is known as a judgement so they can begin to take property away from the debtor like seize assets or garnishee wages or both.

Some frightened but well-intentioned debtors will actually show up at the court to defend themselves. They believe the court should hear about their issues and plans to repay the plaintiff creditor when their finances improve. They plea before the judge that they are not bad people. They assure the court that they will pay when they have the money, when they have the financial ability to pay. And, after the court renders judgement in favour of the creditor, the judge typically explains that the debtor’s good intentions or past history as a good customer are not in question. All the judge can rule on is whether or not the money is owing and/or if the contract for the debt has been breached in some way, like missing a payment or two.

That is the depth and extent of the court’s decision making. Under these circumstances the judge or the court cannot refuse to give a money judgment to the creditor. The debtor(s) lose(s) because the issue of their integrity falls outside the bounds of the creditor’s pursuit of a judgement. The irony is this. In most cases the debtor missed their payments because they didn’t have any money.

Many debtors thought they had a good and honourable reason to ‘default’ in their creditor payments. They are surprised and disappointed that everything boiled down to just one thing – missing the payments and did not include their previous history as a good customer before the job loss or health issue or whatever drove the family into default. None of this mattered to the court.

For many people, this is the worst time and the worst outcome of the court action. A judgement really means giving the green light to bailiffs and creditors to seize assets and bank accounts.

I recall when Small Claims courts in the 1970s were called the people’s court. This court opened an inexpensive door to individuals caught in the emotional turmoil of being wronged in some monetary way. They could get their disputes resolved at a reasonable cost by a neutral and independent third party – a judge.

Unfortunately, the credit industry found the Small Claims court to be a great ally in the collection of debts. Financial institutions and collection agencies routinely utilized Small Claims court to not just get a money judgement but a default money judgement, better known as simply, a default judgement. At the time, if the debtor did not respond in something like 14 days – and most debtors would not go to court – the creditor automatically received a default judgement. They would then, for example, garnishee the debtor’s wages which would tell the debtor (kind of late in the day) what the true meaning of what a creditor could do to them with a money judgement.

By the way, people would not go to court for many reasons.

  1. They were intimidated by a court
  2. They didn’t know what to do
  3. They didn’t have the money to consult a lawyer
  4. They didn’t understand the consequences of a creditor obtaining a money judgement.

Some creditors only wanted default judgements. They really didn’t want to spend the money to send a representative down to the courthouse and argue the case. What they wanted was a fast cheap and easy default money judgement to get at the debtor’s assets.  Many creditors or their agents would abandon the court action if any debtor filed a defense.

Over time, it seems to me that Small Claims court has lost its original purpose and has become a money judgement dispensing machine whereupon creditors insert the necessary dues and fees at the top and the court ejects an automatic default judgement in favour of the creditor at the bottom.

The 2 year statute of limitations has put incredible strain on the court system because now the creditor has little choice but to sue to protect their liability from being wiped out. Increased litigation from all walks of life has resulted– from strata councils – doctors’ bills – dentist bills – utility bills – and a long long list of commercial creditors that do not want to let the debtor go free in just two years.

I think there should be a court for judgement of the integrity and past history of the debtor – to examine the circumstances giving rise to the default in the contract for debt and withhold the issuance of an asset grabbing money judgement against those debtors who have not abused the credit system. The honest debtors who merely struggle with an inability to pay their creditors – and not the intention to pay - should be referred to provincially licensed credit counsellors and federally licensed trustees in bankruptcy for help and advice. Perhaps they could respond to the court with a report within 90 days outlining the appropriate solution or recommended course of action to the debt problem.

Some cases truly need court intervention to referee a valid dispute between a debtor and a creditor ending in a well-reasoned judgment by an independent third party like a judge. Often these kinds of disputes involve the question of whether or not the debt is actually owing, or how much is owing or if default in the contract has occurred.

Debtors who have abused the credit system or have little intention of honouring their contracts should receive a well-reasoned decision and a “writ of execution” in the form of garnishees or the seizure of (exigible) assets being granted to the creditor.

That is the missing link in today’s debt collection process – separating honest but otherwise overburdened debtors from the dishonest and vexatious debtors who cause the most trouble.

More later on this and the new proposed Money Judgements legislation at http://www.newsroom.gov.bc.ca/2015/06/bc-invites-feedback-on-proposed-enforcement-of-money-judgments-law.html

Remember, if you are experiencing financial difficulties do not wait. Call Solutions Credit Counselling at 1(877)588-9491 or fill out our Debt Consolidation Questionnaire and get your Free Credit Counselling Advice today.

For more information visit Debt Canada - your Canadian credit education centre.

If you are a woman in debt, speak with Women and Money first. We specialize in helping women with their personal and business financeMoney management advice you can count on!

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