Thursday, 17 January 2008

I need an ERO

The government have finally woken up to the fact that UK consumers are overloaded with debts. So they have put on their collective "thinking hats" and come up with a solution - "why not have an interest payment holiday for anyone who can not pay their debts".

The plans, prepared by those financial geniuses over at the Ministry of Justice, would allow consumers who slide into financial difficulties through a change of circumstance, such as losing their job or divorce, to stop making repayments their personal loans, credit cards and other debts. All they have to do is apply for “enforcement restriction order”. This scam even has a ill-starred name; it will be called an ERO.

How is this for a classic example of double-speak -. Bridget Prentice, the Civil Justice Minister, said: “We want to ensure that people who run up debts are given every opportunity to pay them off.” How do you ensure that people are given "every opportunity to pay"? You give them a way of evading payment.

If ever there was an idea designed to undermine the financial system, then this is it. What bank would give a loan knowing that the borrower has the right to turn around at some point in the future and say "sorry, I can't pay and I won't pay".

What is the point of trying to save?


2and20 said...
This comment has been removed by the author.
2and20 said...

wow, just wow. this is the dumbest idea i've heard yet.

wait for all the unintended consequences to appear, like making it more difficult to borrow, and higher borrowing rates.

oldftb said...

It just goes to prove that the so called "great and the good" in charge of this sorry mess of a country do not have a grasp of the seriousness of our situation nor a good idea in their heads.

Anonymous said...

What we are witnessing now is a desperate attempt to bail out the sinking ship with a thimble.

Economic chaos and HP deflation are here folks..

We are screwed.