What Would Happen To The Our Economy If Everyone Stopped Paying Loans & Mortgages?
A Reader Asks…
With the country in such a state at the moment I’m sure the banks & mortgage lenders must be worried about payments not being made.
If everyone in the country stopped paying all loans, credit cards etc what would actually happen.
(Scroll down to see responses)
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Tags: Economy, Everyone, Happen, Low Rate Loans, Mortgages, Paying, Stopped, What, Would
August 24th, 2009 at 11:47 pm
there are now £1500 BILLION, outstanding debts held by the UK public. If this amount (which is greater than our annual total economic output) this would be enough not just to cripple our economy, also all the countries we trade with. As it is only some of the total debt has been written off, and we already are aproaching a worldwide recession. Too much debt has been built up in the good times–weve had our party, now its time for the hangover.
August 25th, 2009 at 2:54 am
w/ the way ppl r hurting financially, ppl NEED something 4 pay w/. sometimes when ppl do NOT have the $$$ 2 pay on a creditor’s terms, the fees keep piling up until there’s no hope of EVER getting that debt pd down. when income’s NOT enough, & jobs r B’n lost, ppl just don’t have the means 2 pay. this is y so many ppl r out of homes, & even losing cars. in my town, a cookie factory unexpectedly closed, & many of the workers had families, & even homes, cars, etc. now, the workers r somehow attending hearings & meetings & such about this issue due 2 job loss & 401K’s & the worx. these r the ppl who r most unfortunate when it comes 2 inability 2 pay their debts. jobs r B’n lost everywhere, placing many ppl in this predicament.
August 25th, 2009 at 8:42 am
Well you’re seeing what happens when a small percentage can’t so the answer is obvious. (Click the link below and see what people were saying in 2000, just before the housing boom. It’s really amazing.)
When Bill Clinton forced lenders to lower standards off of the CRA that Carter put into law (Community Reinvestment Act),so that people that couldn’t normally get a home were now eligible, a huge amount of loans were given to people that wouldn’t have normally qualified
.
It sounded great to help lower class people get home ownership when there was a surplus of money but by lowering the standards we took risk we wouldn’t have normally taken. Now you see the end result.
Standards are in place for a reason. With anything, if you start to lower the standards as to what qualifies as acceptable, the end results will go down from what they were before.
August 25th, 2009 at 3:05 pm
Let’s turn this around. What would happen if you loaned your friend $5000 and they stiffed you? You would be in a difficult position and would have trouble paying your bills. Besides, the person just stole the money from you.
It’s the same with banks and other lenders, just on a larger scale. If people steal the money, the lender can’t pay their bills and employees. The lenders go out of business, people lose jobs – exactly what we are seeing now because people did not repay the loans they took out.
August 25th, 2009 at 3:34 pm
Absolute doom. The system is built on debt and credit, if this was to go away, then yep, absolute doom.
August 25th, 2009 at 4:40 pm
hahaha. the reason our economy is in deep **** is because people aren’t paying off their loans and mortgages.
August 25th, 2009 at 7:08 pm
nothing happens love av done it took £500. surly it wont fall if a few did it. i took the money then moved house’s so they still think am living there FREE MONEY
it was for my bond money to move anyway
August 25th, 2009 at 8:08 pm
we wouldn’t have an economy.
August 26th, 2009 at 12:48 am
More bank failures