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[112233]

The Navy has serious consequences for failing to pay debts

http://www.prosper.com/lend/listing.aspx?listingID=208488
(4+ months late, 0/36 payments made)

How accurate is this statement and can this be used as an additional avenue during the collections process?

[mothandrust]

This borrower isn't getting his wages garnished after he racked up 48 delinquencies in the past 7 years, nor does he seem to being disciplined over the 27 current DQ's on his listing.

Don't hold your breath that his CO is going to have him peel potatoes or clean latrines because he's late on his Prosper loan.

When I was new to Prosper, I assumed that "Groups" were based on the model of Joe the Volunteer Firefighter.  I envisioned that if Joe were to fall behind on his payments, the firehouse captain would take him behind the woodshed and say, "People depend on firefighters, Joe.  You can't be a firefighter if you're not dependable.  Now go bring your Prosper loan current or clean out your locker." 

And Joe, whose life's passion is saving lives as a volunteer firefighter, would bust his hump to bring his Prosper loan current.

I soon found out that NO GROUP on Prosper worked this way.  Someone could be an Eagle Scout, Rotarian, NRA member, Presbyterian, etc. and default on his loan and there was never any "real world" consequence like having his Eagle Scout award revoked or being excommunicated from his church. 

Not to say one couldn't build a group around such a model, but this was one of the many novel ideas for groups that no one was willing to implement.

[Nora_Lenderbee]

The Navy has serious consequences for failing to pay debts

What shall we do with a deadbeat sailor,
What shall we do with a deadbeat sailor,
What shall we do with a deadbeat sailor
Early in the morning?

Tie him to the scuppers with a hosepipe on him,
Tie him to the scuppers with a hosepipe on him,
Tie him to the scuppers with a hosepipe on him,
Early in the morning.

Put him in the longboat till he's sober . . .

Shave his belly with a rusty razor . . .

Put him in bed with a Spanish virgin . . .

[Gogmagog]

The penalties for having bad credit apply mostly to security clearances.   If you are a "normal" seamen, airman, or grunt, you won't be affected much.

[Greebo]

Lenders who aren't collecting from the military need to know how to report the bad debt TO the defaulter's CO.

I'll bet most don't.

[cubbiesnextyr]

Lenders who aren't collecting from the military need to know how to report the bad debt TO the defaulter's CO.

I'll bet most don't.

I don't believe your legally allowed to, they have laws you know.

[Greebo]

Lenders who aren't collecting from the military need to know how to report the bad debt TO the defaulter's CO.

I'll bet most don't.

I don't believe your legally allowed to, they have laws you know.

I don't know about that.  One of the things I had learned about in my pursuit landlord status is that military rentals are very solid because if the tenant doesn't get you the rent, you can call the CO's office and count on intervention.

[Fred93]

Lenders who aren't collecting from the military need to know how to report the bad debt TO the defaulter's CO.

I'll bet most don't.

The important question in the current context is whether PROSPER contacts the delinquen't military borrower's CO.  I hypothesize that they do not, as they take almost no appropriate actions against delinquent borrowers, so why should this situation be any different?

[ira01]

Lenders who aren't collecting from the military need to know how to report the bad debt TO the defaulter's CO.

I'll bet most don't.

I don't believe your legally allowed to, they have laws you know.

And what laws would those be?  While such an action would violate Prosper's TOS, I'm not sure what laws it would violate.  It isn't defamation, because it is true.  It wouldn't violate the FDCPA, because lenders are not debt collectors.  Some states may have FDCPA analogs that apply more broadly, but that would probably only apply to lenders in those states.

[cubbiesnextyr]

Lenders who aren't collecting from the military need to know how to report the bad debt TO the defaulter's CO.

I'll bet most don't.

I don't believe your legally allowed to, they have laws you know.

And what laws would those be?  While such an action would violate Prosper's TOS, I'm not sure what laws it would violate.  It isn't defamation, because it is true.  It wouldn't violate the FDCPA, because lenders are not debt collectors.  Some states may have FDCPA analogs that apply more broadly, but that would probably only apply to lenders in those states.

I thought the FDCPA would apply, but I guess not.  It sure would be nice if Prosper started calling CO's (CO's love to get these type of calls).

[traveler505]

Lenders who aren't collecting from the military need to know how to report the bad debt TO the defaulter's CO.

I'll bet most don't.

I don't believe your legally allowed to, they have laws you know.

And what laws would those be?  While such an action would violate Prosper's TOS, I'm not sure what laws it would violate.  It isn't defamation, because it is true.  It wouldn't violate the FDCPA, because lenders are not debt collectors.  Some states may have FDCPA analogs that apply more broadly, but that would probably only apply to lenders in those states.

I thought the FDCPA would apply, but I guess not.  It sure would be nice if Prosper started calling CO's (CO's love to get these type of calls).

It would apply if AmSher made the call.  IMO Prosper is not restricted by the FDCPA.  There used to be long debates about whether the lenders are; I don't think we are. 

BTW (@ Ira) -- I think the applicability of state laws would generally be determined by the location of the borrower, not the lender. 

[mothandrust]

Yet another problem that could be solved by Verified Bidding Endorsements.

There are 106 military-based groups on Prosper and not one of them requires the borrower to get his CO (or even anyone in his unit) to endorse and personally bid on the loan.

[Loan_shark_74]

You do face penalties in the armed forces for failing to pay your debts. It is currently a major problem in the military. Pay Day loans are the main culprit. Soldiers do face demotions and/or discharges for not being honorable with their debts. I do not know the steps involved in notifying the military though.

[misssalaska2000]

I thought I watched something on TV (the most reliable source of info, of course) about how there was a problem with debt and sending soldiers (or sailors, pilots, etc) to Iraq.  Those who have a HUGE amount of debt are being held back from their groups (teams?  comrades?  I have zero understanding of military lingo) because they are at risk for accepting bribes overseas.

Can someone (more knowledgeable than myself, of course) expand upon this?  It seems that this would apply to many of today's soldiers given that consumer debt is at an all time high.

One would also think that if this is a requirement, then credit checks would be run on every soldier before departing to the middle east, no?

[DakotahFury]

I thought I watched something on TV (the most reliable source of info, of course) about how there was a problem with debt and sending soldiers (or sailors, pilots, etc) to Iraq.  Those who have a HUGE amount of debt are being held back from their groups (teams?  comrades?  I have zero understanding of military lingo) because they are at risk for accepting bribes overseas.

Can someone (more knowledgeable than myself, of course) expand upon this?  It seems that this would apply to many of today's soldiers given that consumer debt is at an all time high.

One would also think that if this is a requirement, then credit checks would be run on every soldier before departing to the middle east, no?

missalaska...
I personally haven't heard any stories about people being held-back specifically because of debt. It is a possibility, though. There are many examples, however, of people who can't deploy because they can't receive/maintain a security clearance (as was mentioned earlier by Gog). Reason being...When a security-clearance is processed for someone, one of the clearance-granting agencies initiates a background investigation on the person...including a credit-check. Depending on the level of debt in relation to their income, and the lack of repayment effort...a clearance can/will be denied.

Clearances will be denied not only because they pose a threat to sell secrets, but because a person who is irresponsible with money is likely to be also irresponsible with secrets. They are more likely to leak secrets accidently.

And, yes, every deployment order I have ever seen requires some sort of a security clearance... Be it Secret, Top Secret, or Top Secret X/Y/Z...if you can't get any of them...you're probably not going to deploy.