tbeard1999
SOC-14 1K
Here's how skipping is handled in my campaign.
Banks loan money with the expectation of getting paid. The interest rate they charge is influenced by several factors, but the only one that matters to us is risk -- the risk that the debtor will not pay his obligation. The higher the risk, the higher the interest rate. And if the risk goes high enough, the bank will simply decline to make any loan.
One way to reduce a bank's risk (and the borrower's interest rate) is to show creditworthiness. Of course, adventurers can seldom do this, being shady characters.
The other way to reduce the bank's risk is to provide collateral. Collateral is stuff that the bank can seize and sell to recover their money. The more collateral, the lower the risk and the lower the interest rate.
In a typical starship purchase, the bank loans money to the borrower so that the borrower can buy a ship. The borrower usually puts up 20% of the purchase price as a down payment and agrees to pay monthly payments for 10 years (40 years in a canon campaign). The starship is collateral for the loan. VERY IMPORTANT -- the contents of the starship, whatever they may be, are also collateral. Contents owned by third parties (i.e., cargo) will be released to those parties by the bank.
This gives the bank the right to seize the ship if the debtor defaults. It also means that the ship cannot be sold or transferred without the bank's permission. The loan agreement provides that if you sell or transfer a starship without the bank's permission, the loan is automatically in default and the bank can seize the ship. If you sell the ship to someone anyway, the bank can take the ship from *them* and they can sue you for fraud.
As a practical matter, no one will buy such a ship because the owner lacks the Title, which is documentary evidence that the owner owns the ship free and clear of any bank loans. The bank keeps the Title until the loan is paid off.
If you want to sell your ship, the normal procedure is to have the buyer give the money to the bank. They'll apply the payment to your loan balance and give you the excess. They'll give the Title document to the buyer.
The loan agreement specifies where payments must be made, usually the main office of the bank on the world where the ship is delivered. Banks usually allow you to make payments at any branch bank, affiliate bank or Imperial Reserve Bank.
Most loan agreements contain extra fees for payments made far away. Pretty typical is a fee of 1% of the payment for every parsec of distance from the main bank. Banks will "transfer" your loan to a branch bank in another system, thereby relieving you of the fee. However, this costs a flat cr10,000 and takes 6 weeks. So if you have a "home port", you'll want to transfer your loan there.
Standard late payment fees are 5% of the payment per week it's late. So if you're 3 weeks late with a payment, you must pay the payment plus 15% more.
Since collateral is so important to banks, they are very concerned about it being misappropriated. A borrower can theoretically stop making payments, then abscond with the ship and the bank is in trouble. The primary way that the banks protect themselves is by fitting a "Finance Transponder" ("FT") to the ship. This transponder is similar to the normal imperial transponder in sophistication and tamper resistance. It contains your loan balance, payment history and when the next payment is due. When you make a bank payment, the bank transmits an encrypted update to the FT. Codes change monthly and and are loaded with the update. Normally, the FT broadcasts nothing.
But one week after a payment is overdue, the FT starts to continuously broadcast a "Default Alert" ("DA"). The DA can only be cancelled by the bank, an affiliated bank or an Imperial Reserve Bank. Usually, they'll require you to pay the past due amount, plus fees. Low tech banks cannot transmit an update, but will give you a receipt that will keep you out of trouble until you can get to a modern bank and get it updated.
If your ship is broadcasting a *valid* DA, Imperial law allows any registered salvage agent (which includes skip tracers) to take custody of the ship, using any peaceable means. It also requires the local authorities to seize the ship if requested by a salvage agent, or if they notice the DA. Assuming that the owner really has defaulted, the law requires the bank to pay a "salvage fee" of the greater of 0.1% of the note balance or cr50,000. The salvager is due this fee even if he only reports the ship to the authorities, but only if *someone* takes the ship into custody. The salvage fee is added to the past due amount. Only one salvage agent can collect the fee. First come, first served is the rule.
This means that most high traffic systems have a few "salvage agents" roaming the starport looking for defaulters and an easy 50K. (Salvage agents present on 12+ +6 if starport A, +4 if starport B, +3 if starport C; roll each day. They'll notice you on a 7+ each day in system).
If your ship is seized, you have several options:
1. Produce valid receipts proving that the DA is being erroneously broadcast. Forged receipts are *very* hard to produce (11+ roll, DM + Forgery skill). The documents will be shipped to the nearest bank for authentication. If they are discovered to be forgeries, you have committed a 2nd degree felony, punishable by 5-10 years and a fine not to exceed cr50,000. The local authorities *may* require you to bond the ship until the documents are verified (15+ to require bond, DM + Law Level, DM -1 per cr2000 spent on a lawyer, max -5). See below for bonding.
2. Work a deal out with the bank. If the bank has a branch on this world, go talk to the bank manager. He has the authority to temporarily shut off the DA for up to 1 month. He may even be bribable... Or maybe you can perform a service for him or the bank. Managers of affiliates or Imperial Reserve Banks are a bit more reluctant.
3. Make a payment for the entire past due amount, plus late fees, collection expenses (including "salvage fees"), etc. The portmaster can take the money, but a bank is better. The portmaster can only give you a receipt; he can't deactivate the DA like a bank can. An affiliate or Imperial Reserve Bank can also take the money and can deactivate the DA. If you pay within 24 hours of landing (or orbital docking), any salvage fees are reduced to cr5,000.
4. Bond the Ship. If you need time to clear up some problems, yet can't let the ship sit idle, you can "Bond the Ship." By law, banks must allow you to use the ship for any length of time if you can post a bond equal the lesser of (a) the remaining balance on your loan, or (b) the fair market value of your ship. All you have to do is give the bank or portmaster the money. Oh, you don't have a spare mcr15 lying around? In that case, you'll have to convince a bonding company to bond you. The bonding company basically agrees to pay the bank off if you abscond with the ship. Then you owe the bonding company. In such a case, the bonding company gets the bank's rights to your starship as collateral. A bond will cost a minimum of 0.1% of the loan balance for each month of the bond, for up to three months. The entire bond payment is due *up front*. At the end of the bonding period, you have to return with the ship and either turn it over to the bank or work out a new deal. The 0.1% you paid is the bonding company's fee. If you skip out with the ship, the bonding company will pay the bank off. But now you now have an angry bonding company after you. (You've also committed another 2nd degree felony). By the time the bonding company adds its fees, you'll wind up owing twice as much as you did to the bank. And bonding companies use more...uh, imaginative recovery methods.
5. Let the bank have the ship. The bank will auction the ship and its contents within the next 2 months for (50%+(2d6 x 5%)) of fair market value. From the proceeds of the sale, the bank deducts the loan balance, plus 10% for a default fee. Any remaining money will be paid to you. You can bid on your own ship or contents. If there's not enough to pay the bank off, you personally owe the bank the remainder. Note that unscrupulous bank managers will often rig the auction so that the ship goes for a very low price -- 60% or even less. A buddy buys the ship, then they re-sell it for a tidy profit. You get the shaft, of course. If you still owe the bank, the bank may be able to have the authorities seize your other assets (throw 13+, DM + Law Level). Or you can work out a deal. If you can convince the bank that you have few assets the bank can reach, the bank will usually settle the debt for a single payment of less than what's owed. Settlement amount: 15% + 2D x 5%, DM -5% per level of Admin or Carousing. Remember that defaulting on a loan is not generally a crime. Absconding with the collateral or procuring a loan through fraud is a crime.
Continued
Banks loan money with the expectation of getting paid. The interest rate they charge is influenced by several factors, but the only one that matters to us is risk -- the risk that the debtor will not pay his obligation. The higher the risk, the higher the interest rate. And if the risk goes high enough, the bank will simply decline to make any loan.
One way to reduce a bank's risk (and the borrower's interest rate) is to show creditworthiness. Of course, adventurers can seldom do this, being shady characters.
The other way to reduce the bank's risk is to provide collateral. Collateral is stuff that the bank can seize and sell to recover their money. The more collateral, the lower the risk and the lower the interest rate.
In a typical starship purchase, the bank loans money to the borrower so that the borrower can buy a ship. The borrower usually puts up 20% of the purchase price as a down payment and agrees to pay monthly payments for 10 years (40 years in a canon campaign). The starship is collateral for the loan. VERY IMPORTANT -- the contents of the starship, whatever they may be, are also collateral. Contents owned by third parties (i.e., cargo) will be released to those parties by the bank.
This gives the bank the right to seize the ship if the debtor defaults. It also means that the ship cannot be sold or transferred without the bank's permission. The loan agreement provides that if you sell or transfer a starship without the bank's permission, the loan is automatically in default and the bank can seize the ship. If you sell the ship to someone anyway, the bank can take the ship from *them* and they can sue you for fraud.
As a practical matter, no one will buy such a ship because the owner lacks the Title, which is documentary evidence that the owner owns the ship free and clear of any bank loans. The bank keeps the Title until the loan is paid off.
If you want to sell your ship, the normal procedure is to have the buyer give the money to the bank. They'll apply the payment to your loan balance and give you the excess. They'll give the Title document to the buyer.
The loan agreement specifies where payments must be made, usually the main office of the bank on the world where the ship is delivered. Banks usually allow you to make payments at any branch bank, affiliate bank or Imperial Reserve Bank.
Most loan agreements contain extra fees for payments made far away. Pretty typical is a fee of 1% of the payment for every parsec of distance from the main bank. Banks will "transfer" your loan to a branch bank in another system, thereby relieving you of the fee. However, this costs a flat cr10,000 and takes 6 weeks. So if you have a "home port", you'll want to transfer your loan there.
Standard late payment fees are 5% of the payment per week it's late. So if you're 3 weeks late with a payment, you must pay the payment plus 15% more.
Since collateral is so important to banks, they are very concerned about it being misappropriated. A borrower can theoretically stop making payments, then abscond with the ship and the bank is in trouble. The primary way that the banks protect themselves is by fitting a "Finance Transponder" ("FT") to the ship. This transponder is similar to the normal imperial transponder in sophistication and tamper resistance. It contains your loan balance, payment history and when the next payment is due. When you make a bank payment, the bank transmits an encrypted update to the FT. Codes change monthly and and are loaded with the update. Normally, the FT broadcasts nothing.
But one week after a payment is overdue, the FT starts to continuously broadcast a "Default Alert" ("DA"). The DA can only be cancelled by the bank, an affiliated bank or an Imperial Reserve Bank. Usually, they'll require you to pay the past due amount, plus fees. Low tech banks cannot transmit an update, but will give you a receipt that will keep you out of trouble until you can get to a modern bank and get it updated.
If your ship is broadcasting a *valid* DA, Imperial law allows any registered salvage agent (which includes skip tracers) to take custody of the ship, using any peaceable means. It also requires the local authorities to seize the ship if requested by a salvage agent, or if they notice the DA. Assuming that the owner really has defaulted, the law requires the bank to pay a "salvage fee" of the greater of 0.1% of the note balance or cr50,000. The salvager is due this fee even if he only reports the ship to the authorities, but only if *someone* takes the ship into custody. The salvage fee is added to the past due amount. Only one salvage agent can collect the fee. First come, first served is the rule.
This means that most high traffic systems have a few "salvage agents" roaming the starport looking for defaulters and an easy 50K. (Salvage agents present on 12+ +6 if starport A, +4 if starport B, +3 if starport C; roll each day. They'll notice you on a 7+ each day in system).
If your ship is seized, you have several options:
1. Produce valid receipts proving that the DA is being erroneously broadcast. Forged receipts are *very* hard to produce (11+ roll, DM + Forgery skill). The documents will be shipped to the nearest bank for authentication. If they are discovered to be forgeries, you have committed a 2nd degree felony, punishable by 5-10 years and a fine not to exceed cr50,000. The local authorities *may* require you to bond the ship until the documents are verified (15+ to require bond, DM + Law Level, DM -1 per cr2000 spent on a lawyer, max -5). See below for bonding.
2. Work a deal out with the bank. If the bank has a branch on this world, go talk to the bank manager. He has the authority to temporarily shut off the DA for up to 1 month. He may even be bribable... Or maybe you can perform a service for him or the bank. Managers of affiliates or Imperial Reserve Banks are a bit more reluctant.
3. Make a payment for the entire past due amount, plus late fees, collection expenses (including "salvage fees"), etc. The portmaster can take the money, but a bank is better. The portmaster can only give you a receipt; he can't deactivate the DA like a bank can. An affiliate or Imperial Reserve Bank can also take the money and can deactivate the DA. If you pay within 24 hours of landing (or orbital docking), any salvage fees are reduced to cr5,000.
4. Bond the Ship. If you need time to clear up some problems, yet can't let the ship sit idle, you can "Bond the Ship." By law, banks must allow you to use the ship for any length of time if you can post a bond equal the lesser of (a) the remaining balance on your loan, or (b) the fair market value of your ship. All you have to do is give the bank or portmaster the money. Oh, you don't have a spare mcr15 lying around? In that case, you'll have to convince a bonding company to bond you. The bonding company basically agrees to pay the bank off if you abscond with the ship. Then you owe the bonding company. In such a case, the bonding company gets the bank's rights to your starship as collateral. A bond will cost a minimum of 0.1% of the loan balance for each month of the bond, for up to three months. The entire bond payment is due *up front*. At the end of the bonding period, you have to return with the ship and either turn it over to the bank or work out a new deal. The 0.1% you paid is the bonding company's fee. If you skip out with the ship, the bonding company will pay the bank off. But now you now have an angry bonding company after you. (You've also committed another 2nd degree felony). By the time the bonding company adds its fees, you'll wind up owing twice as much as you did to the bank. And bonding companies use more...uh, imaginative recovery methods.
5. Let the bank have the ship. The bank will auction the ship and its contents within the next 2 months for (50%+(2d6 x 5%)) of fair market value. From the proceeds of the sale, the bank deducts the loan balance, plus 10% for a default fee. Any remaining money will be paid to you. You can bid on your own ship or contents. If there's not enough to pay the bank off, you personally owe the bank the remainder. Note that unscrupulous bank managers will often rig the auction so that the ship goes for a very low price -- 60% or even less. A buddy buys the ship, then they re-sell it for a tidy profit. You get the shaft, of course. If you still owe the bank, the bank may be able to have the authorities seize your other assets (throw 13+, DM + Law Level). Or you can work out a deal. If you can convince the bank that you have few assets the bank can reach, the bank will usually settle the debt for a single payment of less than what's owed. Settlement amount: 15% + 2D x 5%, DM -5% per level of Admin or Carousing. Remember that defaulting on a loan is not generally a crime. Absconding with the collateral or procuring a loan through fraud is a crime.
Continued
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