Why not just walk away?

[Andrea]

This is a joke right?

For your own sanity - assume its a joke! I am.

[Whenwe]

In my opinioin the banks must share some responsibility so i wouldnt have that many sleepless nights about maximising my own advantage (after all they charge you to have the place valued so that they comfortable that the asset covers the bond they loan).

I do agree with most that i want to be responsible and leave with a clean slate BUT i am a first time buyer who purchased last year. I now cannot sell AT ALL due to market conditions. I estimate i would have to take a loss of at least 80k on the bond (excl the 50k i spent cash on the transfer, bond reg and legal fees) to even get bites (3 months on mkt, nobody even looked at the place in last 2 mnths).

I am not in a position to afford that loss so what do you do? Rent out for half the bond? How does one carry 5k per month when you trying to start in a new country? This isnt an option.

If anybody has more details on this VOLUNTARY repossession i woud love to hear it as it could mean i land with a lot more cash than i currently look set to achieve!

Failing this, once i am ready to leave and the house is still not sold you better believe i will send the keys in the post to the bank.

Natand

This actually p!sses me off. I have been renting and saving for the last 2 years because of fears of what is happening now. We also longed for a place of our own to DIY as we want to, to have a pool and garden. BUT our responsibility kept this joy from us. Now just because some people dont care, gives a sh!t or is ignorant or unlucky? of current economic events why should someone alse take the responsibility. You had your joy now face up to the results of your actions as we are for the last 2 years. When you get to Oz are you going to buy a house again despite similiar housing conditions?

<sigh>

Said my piece and feel better now.

[The 3 R's]

Hi,

I'm pretty new here and have been reading a lot on the forum about finance etc. Whereas most people seem to be want to take money over, there might be those not so fortunate. Instead of cash to get out some have a lot of debt to leave behind (and like good citizens hope to pay off as soon as possible). But why not walk away from it: quit your job go insolvent (or whatever the correct term is), get the judgement and make a clean start on the other side (seeing that you credit record here doesn't follow you there) ?

Snowi - I see you have not been back to this thread, maybe you have been scared off by some of the replies ... I hope not, I hope you come back to read this and I hope after my posting you are not gone forever (there is a wealth of information here and there are so many helpful and wonderful people here on this forum) My intention is not to frighten you away - your question was after all hypothetical, my reply though from the heart - this after reading another thread by Mauritz - Once we were a nation, please read it. Sorry, but this is my vent !!

Why are leaving SA, the place of our birth, our family, friends, homes, beloved animals, belongings - everything, for a country that we have never been to ? Most polls say crime, for our children, BEE, the list goes on and on. What has happened to our beloved country (again, please read Mauritz's thread, it's heart stopping) I say, the breakdown of morals, the lack of consequence for your actions and the lack of respect towards others.

SA has become a place where if you commit a crime - murder, rape, steal, defraud, litter the beach, cruelty towards animals, to name a few - you are not punished for your wrong doing, no, in fact you are sometimes rewarded, the guilty have more rights than the victums. There is no example for our youth, the future president has been accused of almost everything but murder, but he will still become president. If you land up in jail, you pay a corrupt prison warden and you are back on the streets. There is no consequence for wrong actions - society has become accepting and in some way, people are influenced - some feel, "if others are doing it, why can't I. Others get away with it, why can't I."

And then the snowball gets bigger and bigger and eventually we land up where we are now, a country destroyed. Why, because there are now too many people (all colours of the nation) that are no longer able to distinguish right from wrong. And some who do know what's wrong (your question to start with), but decide to do it anyway, because why ? What's the worse that can happen ? You have a judgement for 5 years, so what - move along and start over in another country !!

Sorry, but I am gatvol !!!! I am sick of people who know the difference between right and wrong, who look at the consequence and decide - oh thats not so bad, I'll give it a bash - hope I get away with it !!

It's no wonder SA has hit rock bottom. Some of response posts actually spell out the process and answers to all the initial 'hypothetical' questions - was there even a consideration or thought that the initial intention was not to seek help or alternatives, but just to run away from it all ? That the initial intention was 'hypothetically' to commit fraud and that the writer of the initail post was aware that their actions would be wrong, but what was the worse thing that could happen ?

If the initial intention is wrong, unlawful or harmful - then it should be condemmed, not considered.

Sorry, but after reading Mauritz's thread, and wondering how my family and I arrived here, I gave some serious thought to why SA is such a sh!thole. I always placed crime at the top of any of my lists (you know the lists !!!), I am changing the no 1 spot - Our nations moral decay. No 2 - Lack of consequence for actions / no respect for punishment.

[Mara]

I think everyone has vented enough, seems to me this thread is heading one way as well!

PLEASE STOP, take a deep breath, and move on!

[Springbok]

Unfortunately there's no simple answer or easy way out... if you are in a difficult financial position due to debt, it's your own doing and you cannot blame market conditions, the banks, or anything else. I don't agree with the way banks lure people to take on credit when rates are low, but that's how they do business and try to make money, however banks don't force anyone to take on debt. The buck stops with YOU to be financially responsible and resist the temptation of easy credit. For as sure as night follows day, tight economic conditions will follow times of financial excess.

Sure, few people can afford to pay cash for a house, but there are times when it makes financial sense to finance your purchases with debt and times when it does not make financial sense (in which case it's better to rent for a while). I think people should really pay more attention to educate themselves financially and understand economic cycles. You don't buy property when the interest rate cycle is about to turn north after rates were at multi-year lows. Unfortunately society hammers it into our heads that you MUST buy property, because it's a bad thing to rent. Hopefully that silly idea has now been disproved.

While I believe Mboweni was wrong to take the prime interest rate down to about 10% a few years ago, that's life unfortunately and just because credit is freely available, doesn't mean you have to make use of it. What goes down, will go up again and there are always consequences to your actions, whether good or bad. Learn from it and be better prepared next time.

[The 3 R's]

I think everyone has vented enough, seems to me this thread is heading one way as well!

PLEASE STOP, take a deep breath, and move on!

point taken, sorry yesterday was just a BAD day. had 3 technicians from our security company at our house, got chatting - they told me they had recently installed a new alarm system at a house (2 suburbs) away from us - the father had been brutally murdered in front of his 4 year old daughter and wife. just got me so angry - wish we have left here already, but this was not the place to 'let rip'

[Andrea]

point taken, sorry yesterday was just a BAD day. had 3 technicians from our security company at our house, got chatting - they told me they had recently installed a new alarm system at a house (2 suburbs) away from us - the father had been brutally murdered in front of his 4 year old daughter and wife. just got me so angry - wish we have left here already, but this was not the place to 'let rip'

Actually, I think your previous post had some valid points, especially the last two lines!

[zorba]

The 3 R's' ,

... I gave some serious thought to why SA is such a sh!thole. I always placed crime at the top of any of my lists (you know the lists !!!), I am changing the no 1 spot - Our nations moral decay. No 2 - Lack of consequence for actions / no respect for punishment.

[LPH]

If you can lie (say you can't pay when in fact you can) you can steal......

Personally that is what I want to get away from.....

[Gizmo]

It is tempting to take the moral high-ground on this, but I won't.

For one important reason:

Snowi, I have not walked in your shoes and that being the case, I feel it is unfair to judge.

So, moral opinion aside, I would be worried on other counts about walking away from debt.

The world has become a very small place - international cooperation has made it much easier for criminals to be tracked down.

If you do walk away, and if they do find you, they are not going to sit down nicely with you and work out a payment schedule... you could be extradited and will be criminally prosecuted!

The judicial system is very tough nowadays on white-collar crime. It is possible that you could end up behind bars.

Never mind that you could also end up with a criminal record which, effectively will slam the door shut to you every getting into any other first-world country again!!!

If it were that easy to just walk away with no consequences people would be doing this every day and it would not be so easy to take loans and get credit.

[DKH]

Hi Snowy,

On this hypothetical topic I agree with the posts of not running from your debt / responsibilities.

Some personal info on why I agree:

We have tasted the bitter sediment at the bottom of the pit, but never was it an option to not stand and face the realities and take responsibility. Even where the problems were not caused by myself, it was still my responsibility to see it through. Yes, we have made stupid financial mistakes (bloody timeshare salesperson ), but most of our woes were actually caused by combinations of medical incapacitating conditions, being done in in business, victims of crime (theft), etc.

I started out with a 5 year plan for success, but through events it became a 10 year financial nightmare to battle for survival. At one stage I ate marmite and bread for 3 months, but it was not enough to make me quit my responsibilities.

Now, many sleepless nights later things are going very well, and you now what? I feel I can hold my head high, I can face everyone without any negative emotion. This is a great place to be in. It is much more rewarding than sitting somewhere on an idyllic beach and knowing I have 'skeletons in my cupboard'.

I have even resubmitted the last 4 year's stuff to SARS so that they can verify the work that my tax consultant did. They came back and said according to them I owe R18k. Yes, it is very painful to have to try and pay that money with limited income and planning to go to Oz, but I have made arrangements and do it with a smile - because then I know I am a free man ! If I run away from the consequences of my actions I will never be free!

Money come and go, problems come and go, what seems insurmountable now looks like a speed bump in the rear view mirror tomorrow. The only thing that stays permanently with me, is me. I cannot sell my soul for instantaneous gratification.

As example, look at where Arthur J Brown of the Fidentia scandal is sitting now. (I actually know him and Susan back from Varsity days). It all starts somewhere small, but if I don't have the moral fibre to resist it then, it will probably suck me into a spiral of bad decisions.

So, in conclusion, it boils down to right and wrong and my moral standing. The amount of money or size of problem does not change that.

Cheers,

DKH

[Janneman_Kie]

Shame Snowi,

Seems you have opened a can of emotive worms from a lot of people (from the responses it seems they are overreacting just that little bit to make you think) and even being called an idiot by a Sandton dude (JDJoburg or something, with him being from Sandton and keeping up with the dudes next door and all that.)

Seems from the posting that there are a lot of high and mighty people on this thread who want to sit up there and critisize (makes me wonder if they do everything right allways) and luckily a few who really want to help !!

Try some of the other threads which are less violent, because there are some very usefull info here.

Cheers

Ian

[DKH]

Hi Snowy,

Yes, there are some 'forceful' posts, but I think what most are trying to say on this is that we are constantly faced with choices, and it is good to find out what others think, it helps in defining the social response to issues and also to solidify our own positions.

I posted my experience above not to sound holier-than-thou, but rather to show that there are a lot of people who has faced the music and came out better on the other side. Just because some people take the 'easy way out' (does not seem so easy from previous posts anyway) does not mean we have to compromise the choices we make.

The way I look at it:

- Took some decisions (e.g. Buy house + car)

- Have consequences (major debt which interfere with plans to leave earlier)

- Have to take a decision (face or flee)

- Have to face consequences of above - what will it be?

It's just a circle of decisions with consequences leading to decisions with conse.......... If you start wrong it's more difficult to correct later.

Cheers

[JDJoburg]

Shame Snowi,

Seems you have opened a can of emotive worms from a lot of people (from the responses it seems they are overreacting just that little bit to make you think) and even being called an idiot by a Sandton dude (JDJoburg or something, with him being from Sandton and keeping up with the dudes next door and all that.)

Seems from the posting that there are a lot of high and mighty people on this thread who want to sit up there and critisize (makes me wonder if they do everything right allways) and luckily a few who really want to help !!

Try some of the other threads which are less violent, because there are some very usefull info here.

Cheers

Ian

Shame Snowi. All this must be so confusing, especially when kindred souls from small towns (Ian or something, with him being from Pretoria and battling to understand big, pretentious Sandton words like "hypothetical" - gee, stereotypes are fun!) do their bit to make you feel better. I originally come from an even smaller town, where the moustaches are even bigger, my wife's from Pretoria, I drive a Ford and you'd still be an idiot if you don't give me my money back after leaving the country - I need this money to keep up with the dudes next door, before I'm exposed for my Mpumalanga roots.

But, as Ian says, please peruse the other useful info on the forum, we do like to help. I was only being hypothetically agressive, you know.

Hugs and kisses, Danie (a.k.a the Sandton dude)

[Preacher]

It may be unethical but when you consider the state of the country at the moment I can understand why people are desperate to get out. Your life is at risk in SA and I can assue you that the institutions you are looking to so valiantly protect will not give two craps about you when the hits the fan. If you get sick and cant work, do you think the bank is going to worry about you? What about the extra 6 months you spend here which could result in you being injured in a hijacking and then being unable to work? You think they are going to worry about you? Of course not. Its half the reason why we are sitting with the global credit crisis at the moment. You are a number to them. People should never talk about ethics and banks/investment houses in the same sentence. They are some of the most unethical organisations around.

You cannot go to jail for unsecured debt. .That is a fact. It is a civil case! Credit card debt is unsecured loan and it charges higher interest because of the risk people not paying their loan. With credit cards and clothing accounts banks have to do a certain amont of risk profiling. They do this by providing credit based on exisiting assests and/or income. The amount of credit that was handed out before the new national credit act came into place meant that very little risk profiling was actually done with unsecured debt. Its why some banks will lend money to you while others wont. Risk profiling is done differently by all banks. The new NCA provided a stringent methodology for everyone to follow. They have created a uniform system of risk profiling to limit the amount of credit that can be provided.

You can be extradited for unpaid tax. You can be extradited for fraud if you sell a house or car and leave with the money before paying your debt. An investigation of fraud could be opened if you had to clear your accounts out overnight. A student loan from government also has to be paid, much like taxes. With unpaid unsecured debt there is little a bank or organisation can do. This is internationally, not just in SA. If you have no assets to reposses and you are unemployed, YOU CANNOT PAY YOUR DEBT. All the counselling and payment plans in the world will not help you. What happens in this case is that you are eventually blacklisted where you will not be allowed access to credit from any organisation or institution until you have either paid your debts OR a period of time has passed. You cannot be sent to jail for this. Its illegal in almost every western country in the world just to threaten someone with jailtime, let alone actually lock them up. So if you have nothing to take and dont earn enough to pay your debts, there is nothing that can be done other then backlisting. Even if you are blacklisted, A BANK CAN STILL LEND YOU MONEY!

The Australian credit act does not permit local Australian banks or companies to run credit checks on foreign bank accounts for individuals. Its the same in the UK. Its the reason why your credit record is useless in Aus. Your credit history is also non existant. That means if you had a judgement against you or you have been blacklisted, it wont matter in Aus. No company can check your credit records in SA when you go for an interview either. If they do, then one has to question how ethical that organisation is itself.

If your tax is paid and your secured debt is paid or the assets ownership has been transferred to the creditor, they cannot stop you from leaving.

The problem comes when you come back to SA if you ever do. Your credit record will be shot and the way you left the debt behind will be recorded. In SA, from a financial point of view, you are pretty much dead in the water. International credit law is also very complex so it may come back to bite you in the arse one day. There is the ethical or moral issue too which needs to be considered. If they do find you and contact you, it still wont affect your local credit record. You could pay them back based on a repayment plan (like 20cents of every rand you owe) or you could tell them you cant pay.

Here is a story from IOL regarding debt. Do you all honestly think that the banks are going to throw over a million people in jail because they cannot pay back money they should not have been lent in the first place?

http://www.iol.co.za/index.php?set_id=1&am...81731617C368544

In all honsety, you are a blip on the radar.

Edited May 12, 2008 by Preacher

[Narms]

For me it's a moral thing, sorry guys!!

I've spent the money I was responsable for buying what I did so I need to honour that commitment.

I would say: do the best you possible can to recoup, repay what ever you can so you can come over here with a clean consious and start over without any baggage.

I agree with you Nilo - try squash what ever debt you can - we will be in a similar situation.

Not sure of the legal side - personally I think its a moral thing but also in the back of your mind you will always worry if and when it will catch up to you. The last thing you want to do is burn bridges -

One can never tell what the future holds - one day you may have to return for some unforseen reason and then you are in deep hot water - not worth the risk in my opinion.

Best of luck - at the end of the day its your personal decision

Cheers

Narms