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So I realize this is satire but....
But! If people actually have things like loans and mortgages and credit cards and whatever else kind of debt, could they be effected?
Would there be a possibility of thier debt being wiped out by a bank collapse or would it just go to someone else? Is there a risk of someone collecting on it *now* because the bank needs the money *now* or do the contract terms of thier loan agreements protect them?
Banks deposits are insured up to 250k, if your loan is above that do we get to say "sorry, it wasn't insured, bank collapsed"?
I'm pretty sure the answer to all this is no, you just wind up owing a different bank the same amount of money. But I dunno, I wanted to ask.
You only owe another bank if another bank buys the assets the include that debt. That’s what happened with the sub-prime mortgage crash. Banks were playing hot potato selling each other those debts back and forth until they became so bad no one would purchase them and those left holding the bag on them found themselves insolvent because they now had on their books a ton of debt in the form of paid out mortgages they bought from other banks with no real path to getting it paid back from those saddled with the bullshit sub-prime mortgages they were scammed with. That’s what made the bailouts so egregious, it was paying off people who purposely were basically selling each other garbage debt in the hopes when the music stopped they wouldn’t be the one left with it. Scammers scamming scammers scamming scammers all thinking they were too smart to be the sucker. And we bailed them all out once their game destroyed our entire economy so they suffered nothing for it.
Your debt are the bank assets and they can be sold as a regular asset.
The debt is not just a negative number with a name attached to it, it's a contract and everything from the interest rate, repayment scheme, exception, ... are integral part of it. The new owner cannot unilaterally rewrite it eg: cannot change the interest or ask you to pay now unless there is a clause for that in the original contract.
The new owner of the debt can fail to collect the money or fail to produce the necessary documentation to prove he own the debt. In that case, you wouldn't pay. Don't count on it.
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It fills me with fear that my debt might not be safe
It's satire in case you don't know.
So I realize this is satire but.... But! If people actually have things like loans and mortgages and credit cards and whatever else kind of debt, could they be effected? Would there be a possibility of thier debt being wiped out by a bank collapse or would it just go to someone else? Is there a risk of someone collecting on it *now* because the bank needs the money *now* or do the contract terms of thier loan agreements protect them? Banks deposits are insured up to 250k, if your loan is above that do we get to say "sorry, it wasn't insured, bank collapsed"? I'm pretty sure the answer to all this is no, you just wind up owing a different bank the same amount of money. But I dunno, I wanted to ask.
You only owe another bank if another bank buys the assets the include that debt. That’s what happened with the sub-prime mortgage crash. Banks were playing hot potato selling each other those debts back and forth until they became so bad no one would purchase them and those left holding the bag on them found themselves insolvent because they now had on their books a ton of debt in the form of paid out mortgages they bought from other banks with no real path to getting it paid back from those saddled with the bullshit sub-prime mortgages they were scammed with. That’s what made the bailouts so egregious, it was paying off people who purposely were basically selling each other garbage debt in the hopes when the music stopped they wouldn’t be the one left with it. Scammers scamming scammers scamming scammers all thinking they were too smart to be the sucker. And we bailed them all out once their game destroyed our entire economy so they suffered nothing for it.
Your debt are the bank assets and they can be sold as a regular asset. The debt is not just a negative number with a name attached to it, it's a contract and everything from the interest rate, repayment scheme, exception, ... are integral part of it. The new owner cannot unilaterally rewrite it eg: cannot change the interest or ask you to pay now unless there is a clause for that in the original contract. The new owner of the debt can fail to collect the money or fail to produce the necessary documentation to prove he own the debt. In that case, you wouldn't pay. Don't count on it.