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Would a SSIA scheme for debt repayment work?


theObserver@hotmail.com

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In 2001 the then minister of finance introduced a scheme to encourage regular savings by individuals :
For every amount saved in the scheme, the Exchequer will contribute to the individual saver’s account an additional 25% of that amount. This is equivalent to giving tax relief on savings at the standard rate of income tax.
SSIA, SSIA's, Irish Government Savings Scheme , State, SSIA Products Finfacts Ireland

Would a similar scheme aimed at individual debt repayment work?

For every eur spent on servicing personal debt accrued before 2011 (we don't want people taking on additional debt to take advantage of the scheme) the government contributes an additional 25% through giving tax relief on income used to service existing debt. The scheme would run for 12-24 months.

A lot of people are drowning in short term debt on credit cards, medium term loans etc and banks are refusing to issue long term loans to aggregate debts into a single long term repayment. Such a scheme would offer an opportunity to dramatically reduce and shorten the amount of debt owned to banks. Obviously it's expensive to the Irish state both in the lost tax revenue and in disposable incoming being redirected from the wider economy to the banks. But we can take the hit in the short term to reduce individual debt. It offers individuals the option of imposing personal short term austerity to remove the long term weight of debt that is dragging them and us down.
 


ruserious

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Until it effects the State coffers, personal debt will not be looked at by government, unfortunatly.
 

Sync

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..........So someone owes €100 on their credit card because they can't manage their affairs, and you'd like me to pay €20 towards that debt? Um. No thanks.
 

SPN

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Messages
16,891
In 2001 the then minister of finance introduced a scheme to encourage regular savings by individuals :

SSIA, SSIA's, Irish Government Savings Scheme , State, SSIA Products Finfacts Ireland

Would a similar scheme aimed at individual debt repayment work?

For every eur spent on servicing personal debt accrued before 2011 (we don't want people taking on additional debt to take advantage of the scheme) the government contributes an additional 25% through giving tax relief on income used to service existing debt. The scheme would run for 12-24 months.

A lot of people are drowning in short term debt on credit cards, medium term loans etc and banks are refusing to issue long term loans to aggregate debts into a single long term repayment. Such a scheme would offer an opportunity to dramatically reduce and shorten the amount of debt owned to banks. Obviously it's expensive to the Irish state both in the lost tax revenue and in disposable incoming being redirected from the wider economy to the banks. But we can take the hit in the short term to reduce individual debt. It offers individuals the option of imposing personal short term austerity to remove the long term weight of debt that is dragging them and us down.
I see lots and lots of problems with this.

1) The Government currently spends 50% more than it receives in taxes. It has no capacity to give tax relief to anyone.

2) Why should people who were prudent pick up the tab for those who were imprudent

3) Those who are drowning in debt need some help, but the help they need is in money management skills, not in handouts.

4) We need the banks to become profitable so that we can get the maximum return on our investment. The sooner they get their affairs in order, the sooner we can start selling our shares.



You are correct to identify that we have a major debt problem in this country, and it is a problem that effects society beyond the individual people concerned in lots of different ways.

But the solutions will have to be based on individual circumstances, and they will have to be based on people realising that they have to hand back the stuff they cannot afford.
 

Sync

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It's done through tax relief on income used to service debt.
Ah ok so you want to take money out of the health service/social welfare/justice systems. To pay for this person's debt because they can't manage their affairs.
 

DuineEile

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Aug 29, 2010
Messages
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..........So someone owes €100 on their credit card because they can't manage their affairs, and you'd like me to pay €20 towards that debt? Um. No thanks.
You are missing the point, either wilfully or through stupidity. There is a huge cohort of people who are technically insolvent, or who will be soon.

Those debts will not be repaid. What is being discussed is not WHETHER you will be paying for this (ie that the burden is shared through the tax system), but HOW. The key is to ensure all this is done in an orderly way, including the State defaulting (as it must) in a way that is controlled rather than chaotic.

As I have already indicated, I am at the end of my journey with the banks, and will shortly be losing my home. The key to this is doing so in a way that preserves my sanity.

In my case, that will mean handing back the keys, and leaving a well paying job to go on the dole. Once that is done, the banks really can't get any more out of me. My wife and I have discussed this, and if I am to see my kids growing up, that is the only sensible course of action.


You SYNC, no doubt want me behedded, or believe I have assets hidden under the mattress or somesuch nonsense, but the reality is that I ploughed what little savings I had into trying to keep a roof over my head (and in that regard I caution others against doing this), when frankly, I should have defaulted with the bank earlier.

The reason I have lost 10 years of my life (and I am now too old to ever get a mortgage again)? I bought a house a couple of weeks before the property peak, because the commute to work was simply too long from where I was living.

In essence, I have been paying a mortgage for many years, but now won't have the luxury of saying I own my own home.


D
 
Last edited:

DuineEile

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I see lots and lots of problems with this.

1) The Government currently spends 50% more than it receives in taxes. It has no capacity to give tax relief to anyone.

2) Why should people who were prudent pick up the tab for those who were imprudent

3) Those who are drowning in debt need some help, but the help they need is in money management skills, not in handouts.

4) We need the banks to become profitable so that we can get the maximum return on our investment. The sooner they get their affairs in order, the sooner we can start selling our shares.



You are correct to identify that we have a major debt problem in this country, and it is a problem that effects society beyond the individual people concerned in lots of different ways.

But the solutions will have to be based on individual circumstances, and they will have to be based on people realising that they have to hand back the stuff they cannot afford.


Prudence is frankly a matter of timing. Lots of people on here think they are financial wizards, because they didn't get married or need an extra bedroom for a growing family in the years 2003 - 2008 or thereabouts.


D
 

Con Gallagher

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May 25, 2010
Messages
2,413
..........So someone owes €100 on their credit card because they can't manage their affairs, and you'd like me to pay €20 towards that debt? Um. No thanks.
Did you object, in similar terms, to the original SSIA scheme whereby those with spare money to save got free money from the State on top of the bank interest?
 

Sync

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Joined
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Messages
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You are missing the point, either wilfully or through stupidity. There is a huge cohort of people who are technically insolvent, or who will be soon.

Those debts will not be repaid. What is being discussed is not WHETHER you will be paying for this (ie that the burden is shared through the tax system), but HOW. The key is to ensure all this is done in an orderly way, including the State defaulting (as it must) in a way that is controlled rather than chaotic.

As I have already indicated, I am at the end of my journey with the banks, and will shortly be losing my home. The key to this is doing so in a way that preserves my sanity.

In my case, that will mean handing back the keys, and leaving a well paying job to go on the dole. Once that is done, the banks really can't get any more out of me. My wife and I have discussed this, and if I am to see my kids growing up, that is the only sensible course of action.


You SYNC, no doubt want me behedded, or believe I have assets hidden under the mattress or somesuch nonsense, but the reality is that I ploughed what little savings I had into trying to keep a roof over my head (and in that regard I caution others against doing this), when frankly, I should have defaulted with the bank earlier.

The reason I have lost 10 years of my life (and I am now too old to ever get a mortgage again)? I bought a house a couple of weeks before the property peak, because the commute to work was simply too long from where I was living.

In essence, I have been paying a mortgage for many years, but now won't have the luxury of saying I own my own home.


D
1. The proposal isn't there to help you with your mortgage. The proposal related to short and medium term loans, not long term loans like mortgages.
2. In the nicest possible way, if you think a possible solution to the issue of personal debt is that all mortgage holders get 25% tax relief for every euro spent on their mortgage then honestly, I suggest you seek assistance in your future financial planning.
 

theObserver@hotmail.com

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Messages
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Ah ok so you want to take money out of the health service/social welfare/justice systems. To pay for this person's debt because they can't manage their affairs.
Ideally the government would plead for breathing space in bond repayment for the length of the scheme. Even 75% repayment would help. More realistically, yes the fall in tax income and consumer spending must be covered through temporarily government cut backs or the postponement of infrastructure investment. But this will happen regardless. The scheme offers the possibly of a rise in consumer spending and tax income once short term debt is repaid.
 

Sync

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Aug 27, 2009
Messages
28,776
Did you object, in similar terms, to the original SSIA scheme whereby those with spare money to save got free money from the State on top of the bank interest?
Yes. The SSIA was nominally there to get people to save. Really it was there to mature at election time and help FF out. Had it been a pension savings plan then it would have been far more useful.
 

theObserver@hotmail.com

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Joined
Jul 26, 2007
Messages
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I see lots and lots of problems with this.

1) The Government currently spends 50% more than it receives in taxes. It has no capacity to give tax relief to anyone.

2) Why should people who were prudent pick up the tab for those who were imprudent

3) Those who are drowning in debt need some help, but the help they need is in money management skills, not in handouts.

4) We need the banks to become profitable so that we can get the maximum return on our investment. The sooner they get their affairs in order, the sooner we can start selling our shares.



You are correct to identify that we have a major debt problem in this country, and it is a problem that effects society beyond the individual people concerned in lots of different ways.

But the solutions will have to be based on individual circumstances, and they will have to be based on people realising that they have to hand back the stuff they cannot afford.
Credit is the driving force of the modern economy. When you buy on credit with 5% interest, that 5% is now created as profit based on nothing more than your agreement to repay the full amount. The 5% of potential profit then be comes part of the wider economy, to be traded, invested, bought and sold. We have now reached the point where the amount of money, virtual money, far exceeds the amount of goods produced. People handing back the stuff they cannot afford will see a collapse of the modern economy because a) the stuff is now mostly worthless and b) the expected interest profit will not materialize.

4) Individual debt repayment will result in profitable banks. Far more so than people handling stuff back.

3) The time for money management skills has been and gone. We allowed a culture to develop where banks put leaflets into letter boxes offering easy loans for luxury goods. We allowed a culture of imprudent consumption to develop through unchecked advertising, the promise of american fantasy lifestyles and a mismanagement of the macro-economy by the government.

2) People are not picking up the tab. It will require a huge amount of struggle and sacrifice by individuals to repay debt even with government assistance.

1) Ideally the government would plead for breathing space in bond repayment for the length of the scheme. Even 75% repayment would help. More realistically, yes the fall in tax income and consumer spending must be covered through temporarily government cut backs or the postponement of infrastructure investment. But this will happen regardless. The scheme offers the possibly of a rise in consumer spending and tax income once short term debt is repaid.
 

theObserver@hotmail.com

Well-known member
Joined
Jul 26, 2007
Messages
2,424
You are missing the point, either wilfully or through stupidity. There is a huge cohort of people who are technically insolvent, or who will be soon.

Those debts will not be repaid. What is being discussed is not WHETHER you will be paying for this (ie that the burden is shared through the tax system), but HOW. The key is to ensure all this is done in an orderly way, including the State defaulting (as it must) in a way that is controlled rather than chaotic.

As I have already indicated, I am at the end of my journey with the banks, and will shortly be losing my home. The key to this is doing so in a way that preserves my sanity.

In my case, that will mean handing back the keys, and leaving a well paying job to go on the dole. Once that is done, the banks really can't get any more out of me. My wife and I have discussed this, and if I am to see my kids growing up, that is the only sensible course of action.


You SYNC, no doubt want me behedded, or believe I have assets hidden under the mattress or somesuch nonsense, but the reality is that I ploughed what little savings I had into trying to keep a roof over my head (and in that regard I caution others against doing this), when frankly, I should have defaulted with the bank earlier.

The reason I have lost 10 years of my life (and I am now too old to ever get a mortgage again)? I bought a house a couple of weeks before the property peak, because the commute to work was simply too long from where I was living.

In essence, I have been paying a mortgage for many years, but now won't have the luxury of saying I own my own home.

D
Sorry to hear that.

Why do you have to give up your job? I thought most banks offered to rent reprocessed homes back to the original mortgage owner?
 

H.R. Haldeman

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Oct 1, 2008
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4,444
You are missing the point, either wilfully or through stupidity. There is a huge cohort of people who are technically insolvent, or who will be soon.

Those debts will not be repaid. What is being discussed is not WHETHER you will be paying for this (ie that the burden is shared through the tax system), but HOW. The key is to ensure all this is done in an orderly way, including the State defaulting (as it must) in a way that is controlled rather than chaotic.

As I have already indicated, I am at the end of my journey with the banks, and will shortly be losing my home. The key to this is doing so in a way that preserves my sanity.

In my case, that will mean handing back the keys, and leaving a well paying job to go on the dole. Once that is done, the banks really can't get any more out of me. My wife and I have discussed this, and if I am to see my kids growing up, that is the only sensible course of action.


You SYNC, no doubt want me behedded, or believe I have assets hidden under the mattress or somesuch nonsense, but the reality is that I ploughed what little savings I had into trying to keep a roof over my head (and in that regard I caution others against doing this), when frankly, I should have defaulted with the bank earlier.

The reason I have lost 10 years of my life (and I am now too old to ever get a mortgage again)? I bought a house a couple of weeks before the property peak, because the commute to work was simply too long from where I was living.

In essence, I have been paying a mortgage for many years, but now won't have the luxury of saying I own my own home.


D

Sorry to hear about your situation.

The way to rationalise the highlighted bit is that everyone has to pay for abode, so if you hadn't paid mortgage you'd have paid rent. So you haven't actually lost that money - you were paying for the utility of your house, which was worth it for your family.

And why do you have to leave your job? So the bank doesn't pursue you for debt? That seems a bit crazy if you don't mind me saying.
 

SPN

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Credit is the driving force of the modern economy.
Credit WAS the driving force in the bubble economy.

That day is gone.




We have now reached the point where the amount of money, virtual money, far exceeds the amount of goods produced.
Quite the opposite. We have now reached the point where the amount of money in the economy is much LESS than was the case previously (where credit was masquerading as money). The process we are going through at the moment (called Debt Deflation) is seeing a re-pricing process right across the economy as prices drop to reflect the amount of money in the economy.



People handing back the stuff they cannot afford will see a collapse of the modern economy because a) the stuff is now mostly worthless and b) the expected interest profit will not materialize.
The collapse is already happening, due to the ending of the credit bubble. It is called Debt Deflation.

The interest will not materialise because the interest was supposed to come from the issuing of new debt.

The stuff is not worthless, but all "stuff" is being repriced as part of the Debt Deflation process.
 

hammer

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Jul 6, 2009
Messages
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You are missing the point, either wilfully or through stupidity. There is a huge cohort of people who are technically insolvent, or who will be soon.

Those debts will not be repaid. What is being discussed is not WHETHER you will be paying for this (ie that the burden is shared through the tax system), but HOW. The key is to ensure all this is done in an orderly way, including the State defaulting (as it must) in a way that is controlled rather than chaotic.

As I have already indicated, I am at the end of my journey with the banks, and will shortly be losing my home. The key to this is doing so in a way that preserves my sanity.

In my case, that will mean handing back the keys, and leaving a well paying job to go on the dole. Once that is done, the banks really can't get any more out of me. My wife and I have discussed this, and if I am to see my kids growing up, that is the only sensible course of action.


You SYNC, no doubt want me behedded, or believe I have assets hidden under the mattress or somesuch nonsense, but the reality is that I ploughed what little savings I had into trying to keep a roof over my head (and in that regard I caution others against doing this), when frankly, I should have defaulted with the bank earlier.

The reason I have lost 10 years of my life (and I am now too old to ever get a mortgage again)? I bought a house a couple of weeks before the property peak, because the commute to work was simply too long from where I was living.

In essence, I have been paying a mortgage for many years, but now won't have the luxury of saying I own my own home.


D

Surely they will put you on interest only ?

They will do everything they can to keep you in the property. I know of very few people that would even consider buying a repossessed family home.

Stop all payments immediately and get them to the table.

Do not give up your job, under any circumstances.

Best of luck.
 

fergus34

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Due to Car insurence rates, and accomodation pays as well as householdcharges, we'll see what points we should work out.
 

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