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A Helpfule Hint About Unconscionable Loans and Contracts
The loan companies have taken some hits from Congress. They've had to change their rules. They were getting away with anything off the backs of the desperate. Not anymore. Some things have changed. I love it when these big loan companies are finally faced with choices they don't appreciate. The funny thing is that's irony. Contracts: An agreement between two people. They used to have rules. The simplest one is that both sides have to honor their part in the agreement. Not necessarily. I learned a new term the other day. Unconscionability! It's a term to learn. Definition - A seller's taking advantage of a buyer due to their unequal bargaining positions, perhaps because of the buyer's recent trauma, physical infirmity, ignorance, inability to read or inability to understand the language. The unfairness must be so severe that it is shocking to the average person. It usually includes the absence of any meaningful choice on the part of the buyer and contract terms so one-sided that they unreasonably favor the seller. A contract will be terminated if the buyer can prove unconscionability. Credit cards, mortgage companies and quick loans often try to bind you with contracts that are unconscionable. If you read that entire definition, you'll see that the seller (loan company) can no longer have an unfair advantage over you. Mortgage rates that are not fixed are no longer allowed to get out of hand. Credit cards put in place to help you establish credit can no longer have unrealistic terms. Quick loans are no longer allowed to take advantage of your adverse situation. If you can prove it, you are out of it. One case I know for sure where I heard this term used by the judge was Judge Mathis. A pawn shop owner who worked with celebrities, the type of celebrities who would be in the limelight one day and then down and out the next, had accepted items from one particular individual. When the individual returned to pick up his items, they were damaged. The pawn shop owner had words in his contract that released him of liability if the items were damaged. Mathis called this unconscionable. If you are a pawn shop owner and you take charge of items for a period of time for an amount of money, you are responsible for returning those items in the condition they were received. Otherwise, your contract is written so one-sided that it unreasonably favors you. It becomes unconscionable. Remember that when you are dealing with people. Not just credit cards and loan companies. Every contract you are bound by has to be fair for both sides. This fact is one of the factors making it easier for you to demand competition of creditors. They have to compete now because they've been forced to "conscionable..."
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Contributor's Note
More information available on the Cashsurfers blog.
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