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Hi All,
Resi Mortgages has kindly contributed this article - it definitely provides food for thought on debt consolidation.
Resi Mortgages has kindly contributed this article - it definitely provides food for thought on debt consolidation.
Debt Bondage or bonded labour as way of paying off a family’s loans via the labour of family members or heirs has a long tradition. With New Zealands’ rising personal debt figures, could we see this form of debt recovery occurring here?
In the United States for instance student loans can be viewed as a contemporary form of debt bondage. There, student loans are no longer dischargeable in bankruptcy and, without a guarantee of an income allowing debt repayment, income tax refunds etc are routinely seized as a means of debt recovery.
In New Zealand student loans can be discharged in bankruptcy but rising student debt (as out lined by Act Party member Deborah Coddington 10th Jan 2005), may tempt government to introduce a form of bonded labour. It would be a brave move indeed to extend this to living or future family members but the suggestion has been mooted before. The idea of making parents responsible for their children’s court fines etc could be seen as a form of debt bondage.
With most New Zealand households servicing increasing debt, it is within the realms of possibility that those on low incomes could become targets for unscrupulous loan companies to offer various forms of debt bondage as a means of clearing the debt rather than facing bankruptcy.
“ New Zealanders’ have been slow to utilize their major asset (their home) as means of escaping the debt cycle. By combining all debt into one low interest mortgage at a means that payments are often made cheaper and more manageable,” Resi Mortgage Corporation director Ros Kirkland says.
The whole idea of debt consolidation however, is not to get into more debt again and closely manage credit card spending. To repeat the cycle only adds to the chances of bankruptcy or falling into the debt bondage trap.
In the United States for instance student loans can be viewed as a contemporary form of debt bondage. There, student loans are no longer dischargeable in bankruptcy and, without a guarantee of an income allowing debt repayment, income tax refunds etc are routinely seized as a means of debt recovery.
In New Zealand student loans can be discharged in bankruptcy but rising student debt (as out lined by Act Party member Deborah Coddington 10th Jan 2005), may tempt government to introduce a form of bonded labour. It would be a brave move indeed to extend this to living or future family members but the suggestion has been mooted before. The idea of making parents responsible for their children’s court fines etc could be seen as a form of debt bondage.
With most New Zealand households servicing increasing debt, it is within the realms of possibility that those on low incomes could become targets for unscrupulous loan companies to offer various forms of debt bondage as a means of clearing the debt rather than facing bankruptcy.
“ New Zealanders’ have been slow to utilize their major asset (their home) as means of escaping the debt cycle. By combining all debt into one low interest mortgage at a means that payments are often made cheaper and more manageable,” Resi Mortgage Corporation director Ros Kirkland says.
The whole idea of debt consolidation however, is not to get into more debt again and closely manage credit card spending. To repeat the cycle only adds to the chances of bankruptcy or falling into the debt bondage trap.