Comment by speeder | Hacker News Reader

Comment by speeder | Hacker News Reader

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I am someone with student debts.

For the past 4 years, I mostly worked on what I could, not what I really wanted...

Happily, sometimes there was a overlap, but how it is not slavery?

I cannot quit. I cannot choose what I will work with (mostly, every time I was without a job, I had to accept whatever offer came by, the few times I tried to be picky I ended even more indebted to buy food). I cannot live where I want... And so on.

With some employers, I did feel owned, because even if they did not knew I was in deep debt, they could push me to do whatever they wanted, just with a small treat of dismissal, because I CANNOT afford be dismissed, my debt payment is way above the country average wage, and for the last years I've been living reaching the end of each month slighly indebted or with a zero balance in the bank.

I dread the day I suffer some accident, near my home people ignore the red light a lot, and I think if I ever get hit by a car, I don't have money to pay medical expenses. (my parents are also in debt, partly by their incredible education expense they had with me, sometimes taking loans they knew they could not pay just to pay for my schooling).

Right now I am co-founder in a startup, and every time our cash starts to run low, conflicts flare up quickly, because the pressure becomes immense, it generates lots of instability, and I already lost two relationships over this (ie: not over having a startup, but having those debts and financial instability and extreme dependance on employers).

I believe we are really heading for a de facto Wage slavery (mainly now that you can't declare bankruptcy from students debts)

http://en.wikipedia.org/wiki/Wage_slavery

I am from Brazil, there is no personal bankrupcty.

Also, your debts are inherited, mandatorily, specially if you have spouse, kids, or parents (in the order. if you die, your spouse will get at least 50% of your debts, if you don't have one, then your kids will be forced to take at least 50% of your debts, if you don't have kids, then your parents... the other 50% must be inherited by someone too, but you can choose with your will who will be the unlucky person).

And because a side effect of inheritance laws, the government can (although I never heard about it doing it) give your debts to a third cousin even.

Also, another thing is that here in Brazil student debts commonly have as collateral the assets of a third party (in fact all sorts of debts here work that way, except for companies), so if I DO fail to pay my debt, then it will pass to my parents, that are already indebted and will certainly fail to pay it, then their stuff will be taken (and I don't have anything to be taken, my 3 most valuable assets are my laptop, my phone, and my glasses).

EDIT to joseflavio: Your link is about law in Portugual, not Brazil, note the currency mentioned is Euro, not Reais.

EDIT2 to joseflavio: I got curious enough, to see if there is anything analogous in Brazil, and indeed there is, by another name "renuncia".

The law (I will skip the non-interesting part) about "renuncia":

Art. 1.807. O interessado em que o herdeiro declare se aceita, ou não, a herança, poderá, vinte dias após aberta a sucessão, requerer ao juiz prazo razoável, não maior de trinta dias, para, nele, se pronunciar o herdeiro, sob pena de se haver a herança por aceita.

Art. 1.812. São irrevogáveis os atos de aceitação ou de renúncia da herança.

Art. 1.813. Quando o herdeiro prejudicar os seus credores, renunciando à herança, poderão eles, com autorização do juiz, aceitá-la em nome do renunciante.

§ 1o A habilitação dos credores se fará no prazo de trinta dias seguintes ao conhecimento do fato.

§ 2o Pagas as dívidas do renunciante, prevalece a renúncia quanto ao remanescente, que será devolvido aos demais herdeiros.

Thus in short: You have 20 days to renounce your inheritance.

If your are inheriting debts and renounce your inheritance, your creditors can sue to force you still inherit the debt and pay them, and after the debt is paid, the "good" parts of the inheritance get successfully renounced and go to someone else, thus attempting to renounce a debt only results in punishment, since you still get the debt, but DON'T get the good parts of the inheritance.

This must make it so much more difficult for the the poor to ever escape their condition. I suppose it's common for an entire family tree to just tell lenders to take a hike, but then their only way to borrow money is through the black market, and there must be vanishingly few legitimate business opportunities were a person would feel confident that they could make enough money to pay loan-shark rates.

I'm sure this policy is detrimental to class mobility and entrepreneurship, but I'd be interested to know if it even promotes a more profitable loan market than in countries with legal bankruptcy.

What you think?

http://online.wsj.com/article/BT-CO-20130730-705372.html

Banks here are breaking their own profit record for several years in a row, while the economy is almost in recession (last year 0.9% in growth, inflation currently 6.7%, also credit card rate is around 450% year.

Last time I had to take a loan with the bank (instead of temporary negative balance) I paid 100% on a 6 month loan.

The negative balance pays 10%/mo of your current balance (thus if you never repays it, you get a rate of 300% year)

EDIT: "what do you think?" is a real question, I don't have data on other countries to know how much loan banks profit there.

This analysis is wrong. One inherits the debts, but only up to the value of the assets inherited. See Art. 1.792

Art. 1.792. O herdeiro não responde por encargos superiores às forças da herança; incumbe-lhe, porém, a prova do excesso, salvo se houver inventário que a escuse, demostrando o valor dos bens herdados.

Free translation:

Section 1792. The heir is not liable for charges greater than the forces of inheritance: it must, however, provide evidence of excess, unless there is inventory to excuse himself, demonstrating the value of inherited assets.

I did not saw that, thanks.

Although you must still prove yourself that the debt exceeds the assets, this can get very problematic in some cases (like I guy I know that AFTER he died, people found out that beside his official wife and his 2 previous divorced wives, he also had 5 other "marriages", and the 7 women did not knew each other, he had children with all of them, and each one thought he owned a different business... this case is still in inventary hell, but last I heard of it, they concluded each child will inherit 10 million BRL each plus lands... but they don't started yet counting the debts... also, all of the women were correct, he never lied about what he owned, only he never presented anyone with the full truth, to each one he presented himself owning a different business he really owned, I wonder how the guy pulled that off)

Wow... My father is a civil lawyer and deals with inventories regularly, but I don't think he's ever gotten a case so contrived. And I fully agree that having to prove the debt exceeds the assets is a major annoyance. Anything that puts the brazilian justice system in your back (especially in this case where the burden of proof is inverted), is a nightmare.

Oh, well that's effectively no different than probate.

I am no lawyer... but I think it doesn't work exactly this way. You just inherit the debts if you decide to accept the inheritance (you have the option to just repudiate it).

http://insolvenciapessoal.com/dividas-para-os-herdeiros/ (in Portuguese)

I live in France, and as far as I know, it works the same way. In Brazil your main residence is even protected (if you live on it)... only my 2c, but in in my opinion, US is still the scariest.

Your link is about law in Portugual, not Brazil, note the currency mentioned is Euro, not Reais.

But I got curious enough, to see if there is anything analogous in Brazil, and indeed there is, by another name "renuncia".

The law (I will skip the non-interesting part) about "renuncia":

Art. 1.807. O interessado em que o herdeiro declare se aceita, ou não, a herança, poderá, vinte dias após aberta a sucessão, requerer ao juiz prazo razoável, não maior de trinta dias, para, nele, se pronunciar o herdeiro, sob pena de se haver a herança por aceita.

Art. 1.812. São irrevogáveis os atos de aceitação ou de renúncia da herança.

Art. 1.813. Quando o herdeiro prejudicar os seus credores, renunciando à herança, poderão eles, com autorização do juiz, aceitá-la em nome do renunciante.

§ 1o A habilitação dos credores se fará no prazo de trinta dias seguintes ao conhecimento do fato.

§ 2o Pagas as dívidas do renunciante, prevalece a renúncia quanto ao remanescente, que será devolvido aos demais herdeiros.

Thus in short:

You have 20 days to renounce your inheritance.

If your are inheriting debts and renounce your inheritance, your creditors can sue to force you still inherit the debt and pay them, and after the debt is paid, the "good" parts of the inheritance get successfully renounced and go to someone else, thus attempting to renounce a debt only results in punishment, since you still get the debt, but DON'T get the good parts of the inheritance.

Wow... impressive and scary, 20 days is nothing, and the worse is that sometimes the debts can show up way later...

Holy Jesus Christ.

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