Icelandic public going bankrupt

When the collapse happened inevitebly, the people who suffer is the general public. A story posted one Eyjan.is is a shining example of what is happening here. There are other similar stories out there, in abundance, and they are on the increase.
In short. Couple buy a house a year before the economic collapse, he works for a bank. When the banks collapsed his vages were cut by 2/3. She kept her salery but the loss in wages made things hard to make ends meet, and the mortgage payments couldn´t be made.
After talking to the bank manager at their local branch, they where asked if anyone they knew could pay for them. That was not possible. According to the new banruptcy law here in Iceland, if someone goes bankrupt it lasts for two years, instead of seven years, before the financial collapse. This was done to help people survive.
After this two year period the bank said it would keep the claims open for 10-12 years, and they would never be dept free, even if they go through bankruptcy. Then the couple asked the bank to write off a part of the debt simply because the house they bought was decreasing rapidly in value and the loans so high and in fact rising all the time. The bank manager said that would NEVER be done.
The man will loose his job, because the banks policy cannot let a bankrupt man work for them.

The woman who tells the story claims there is nothing they can do other than go bankrupt.
She asks what is going on? The banks and the government say they will do everything they can do help the general households in the country, she asks if this is the way to do it, since it goes against everything the government says. It all talk, no action when it comes to saving homes she says.

This story has recieved a massive public outcry online. Having been an avid reader and conributer online for years, I was actually shocked to see what is being said online in connection to this story. Things have been grim the last 6 months, but things are getting worse for so many people, and the blogsphere captures it all.

Here are a few examples:
-“The banks are going to push people to bankruptcy until the moment comes when they eventually have to write off depbts, even though the government told them to stay calm and give people a chance.”
-“The banks do what they want, and completely ignore the governents whishes. The new government is not in any rescue mission for the homes like they claim to be.”
-“People should start a holding company the buys the debts from the owners and then they can stop paying and walk away and let the company be go down with the depts, all the banks and business men who drove the nation into this farce are doing it, why cant the public do it as well?”
-“Why should those individuals who took foreign currency loans, that the banks blew out of all proportion, have to pay, when at the same time the banks have long since written off billions of their corporate clients? ”
-“…I would not be surprised if news of people would take up firearms to either defend their homes from the repo men, or simply to take out revenge against a system that is badly broken and puts numbers on paper ahead of people in need.”
-“It seems to me that the power of managing people´s debts should be taken from the banks and put into a special office run by the government itself, or something similar.”
-“…people who are going broke because of trivial matters should not give in and should defend their property, even if it means taking up arms. Especially when the government has not shown any will to actually bring those individuals (bank managers, bank owners) who are directly to blame for the whole mess, to justice. It is bound to happen sooner or later that someone will to more than just talk back. FME uses bank secrecy in order to protect the owners and business people, from prosecution, by not handing over material to the special prosecutor. Scandal.”

Advertisements

About this entry