Anonymous asked in Business & FinanceCredit · 1 month ago

what happens if the credit card bubble bursts ?

will the credit companies go bankrupt and therefore the debtors not need to repay their credit cards?

10 Answers

  • RICK
    Lv 7
    1 month ago

    Even if the CC companies go bankrupt the money is owed and the debtors stillness to repay

  • 1 month ago

    If the credit companies go bankrupt, the debts DO need to repay their credit cards.

  • 1 month ago

    Only in a dream. The debts owed to the credit card companies would be purchased from them by another corporation and you would owe the new owner.

  • Judy
    Lv 7
    1 month ago

    Uh, wrong, they'd still need to repay, just to someone else who bought the company's assets.

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  • 1 month ago

    If the "bubble" bursts then a few banks might go out of business and their accounts will be purchased by other banks. Nobody's debt gets canceled unless you actually file personal bankruptcy or negotiate a settlement with the owner. It would just mean you end up paying off the debt at another bank instead of the one you originally borrowed from.

    this is exactly what happened to me with my first mortgage. I bought my first house in 2007 and got a mortgage from a company called "Countrywide Home Loans"

    When the housing market crashed in 2008 there were too many people who couldn't (or didn't) pay their mortgages and Countrywide Home Loans became insolvent and entered bankruptcy. I still owed them a mortgage payment every month. After a bunch of court hearings Countrywide home loans went out of business and all their accounts were auctioned off to other banks. People who owned shares of Countrywide stock lost their money and people who had loaned money to Countrywide got only partial repayment - that's the risk of buying stocks and bonds.

    During this process my mortgage was purchased by Bank of America. The only thing that changed for me was my monthly statements now had Bank of America's logo at the top instead of the Countrywide logo, and the address where I mailed the check each month was different. I still owed the same amount both in monthly payments and total balance, my interest rate and loan term were fixed.

    The same thing would happen to credit card balances if the bubble "bursts" - a few banks might go out of business. People who own stock in that bank might lose their investment and people who held bonds might get little or no money back. But people who owe money to those banks will have to send their payments to the new bank and would be sued if they don't keep up with their payments.

    Its not like some free reset where you can just walk away from your debt.

  • Anonymous
    1 month ago

    Immature 14 year old.

  • G
    Lv 5
    1 month ago

    Visa has $10B in working capital $46B in invested capital and $8B in free cash flow. No one is going bk anytime soon.

  • 1 month ago

    That sucks! My crfedit cards are all paid off.

  • ?
    Lv 6
    1 month ago

    The bankruptcy will include collecting debts.  

  • Murzy
    Lv 7
    1 month ago

    They are usually backed by banks so they will get their money.

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