Who is responsible for our debt?

mayb_2

I think it is more difficult to keep track of your spending when it is all done via credit and debit cards. It takes time for these spends to show up on your statements and it is easy to forget to keep a running balance. I have a friend who takes out cash from her bank account on pay day and divides it up into tins marked, shopping, petrol etc. Once the money in that tin is spent there is no more until next pay day. Quaint but effective don't you think?

Before credit and debit cards came along cash or cheques were the only way to go. Unless you had rich folks there was no way of borrowing money the way we do now (well there was probably the pay us back with interest or we'll break your legs type of loan) so you had to manage on what you had. Perhaps we should start a trend and deal only in hard cash.

I don't think it helps that graduates start off with large debts. They either have to accept these as 'normal' so as not to worry themselves to death over it, or feel weighed down by them before they start. If you take the premis that it is ok to be in debt for your student loan - then it must be ok to be in debt. So you leave university with a debt and you probably need a car - so more debt - then you need somewhere to live - a bit more debt - you probably wont get paid for the first month of work - little bit of an overdraft there - and so on and on. This surely has to put you at a disadvantage attitude wise, let alone money wise.

Our debts are our own responsibility but we are being pushed by an ever increasing tide of advertising, and a rising tide of expenses into feeling it is the only way to get by. It is no longer what you earn but how much you can borrow on what you earn that offers status - are you a gold or platinum card holder for instance. If you want to buy on the internet, over the phone etc you need a credit or debit card.

sarymclary

There seems to be an assumption that all debt is incurred by the person that ends up with the responsibility of paying it off.

Life isn't always that simple. I wish I'd had a university education, exotic holidays, hi-tech TV's and gadgets filling my home, a top of the range car on the drive, and designer togs in my wardrobe, to name but a few of the luxury items mentioned. However, I was left with an enormous debt by my deceased husband, the upkeep of 4 young children and a home I could no longer afford to either pay for or maintain. Whilst I kept the bank from my door to prevent them repossessing, I maintained our lives on several credit cards, which had until then remained unused. It took over 3 years to sell my house, dropping the price again and again. I sold it with only 2 months left to maintain the minimum payments, before it all went t*ts up! We became homeless, but we ultimately became debt free.

We live in a tiny home, in a not so nice area, which has been a culture shock for us all, but we can afford it. Whilst not all the debt was mine, I accepted the responsibility of clearing it, and maintaining my finance dignity in the process. My children would like to have a lot of things that I'm sure they feel they need however, unless we save up for it, they're not getting it. I'm determined to raise them to pay as they go, and to have realistic expectations. If they want fancy stuff, then they've got to work very hard to get the fancy job to acquire the goods - in cash!

EllieB_2

The last post sums this debate up - yes it is "our" individual fault - but at the same time acknowledging the pressures of society . Enough. Let me tell you the roots of debt. They fall into specific groups. 1. People who do not have enough income to live on. They are on income support or other benefits and income is woefully inadequate to cover their outgoings. 2 People who are earning, typically young people between 18 and 35 who have always been fed with the idea that debt is "ok", not least from the government in then form of student loans etc. 3) People who have worked hard, have mortgages and are marketed hard to take out further secured loans and massive unsecured debt. These are just examples. It infuriates and saddens me that people feel they should take personal responsibility for the predatory tactics of banks, loan companies and mortgage comnpanies. What about corporate responsibilty? where is that in this debt ridden society that we live in? Enough of personal guilt. The day Halifax comes to me and says I am really sorry for lending you that money I knew you could never repay - that is the day I wil feel guilty for being in financial difficulty. Until then **** off. Love to all in financial problems - and remember the financial institutions that lent that money they never bothered to check whether you could repay bear equal resonsibility. xx.

mayb_2

Well said EllieB - I'll second that. Those probably worst affected by debt won't be joining in this debate or benefiting from the advice available here because they can't afford a computer or a link to the internet! Some of them do not have access to a landline phone to speak to anyone about it either, but they do get targeted by television adverts and mail offering them credit cards and loans and catalogs.

juliaw

OK we are all personally responsible for buying things that we can't afford - but magazines, newspapers, TV programmes all go on as if everyone earned at least £150,000 per year. Ever looked at the Sunday Times? Everybody else appears to be buying second homes abroad, sports cars, designer clothes costing thousands, spa treatments, four holidays a year - all the time. Stupid situation comedies, especially those from America, show very affluent people who have minimum wage jobs. Even Eastenders has characters keeping families on part-time minimum wage jobs. If it wasn't for websites like this I would think I was the only one without money to spare.

Nutty_Netty

I do blame the advertising and change in attitudes to credit. Many years ago if you wanted a loan it was extremely difficult to get one without jumping through hoops to prove you could pay it back. You had to state what is was for i.e. a car and supply all the details of sale before the bank would even consider lending to you. Now there are so many companies lending out credit it has made it so easy very little thought is needed before hand as to the consequences. Many young people have grown up thinking this is the norm even my 10 year old says just go to the hole in the wall if i say i can't afford something. I have great difficulty trying to get her to understand that there has to be money in the bank to get it out!!!! She has also quoted the credit adverts on the tv to me!!!! Ultimately it is you who signs the forms so the buck does stop with you but if you are brought up thinking that credit is fine you won't find out the truth until it is too late

MrsFrugal_2

I agree with everyone else that we are responsible for our own debt - we in this case being my fiance and myself. We've had extenuating circs and bad luck, but we had our eyes open with every credit card purchase and loan we took out. What's scary is that we're intelligent well-educated people and we've got into this mess (joint debt of about £60k), god knows what must happen to people less equipped to handle the facts and figures.ut

Having said all that, we are led to believe that we can expect a certain standard of living and there is an - in our case unspoken - social pressure to conform. I know for sure we're less well off than most of our friends locally but to all intents and purposes we appear fine. Things like not owning our home and only being able to run one car (not funny when you live in the sticks and have three children to ferry about), not having smart holidays or going out much, give us away but in a subtle way. It's quite exhausting appearing to be like everyone else when wondering how the hell I'm going to pay for any food this week. We don't set out to appear well off, we just seem to rub shoulders with people who are and make assumptions about us based on some of what they see. Britain's not a third world country, people expect you to clothe, feed and house your children to a certain standard and that's a pressure. It's not one we can afford to bow to though - my 4 yr old daughter has as many if not more second hand clothes than new, we now can't afford to buy fruit juice and the children are limited to two pieces of fruit a day as we can't fund more. It seems ridiculous and not 'who we are', only it is.

mayb_2

I have never felt embarassed to buy clothes or other things from charity shops and ebay can be a godsend. It is amazing what some people give away. My best bargain from a Salvation Army shop was an unworn suit from Next. You don't have to shout about it and its better than spending on a credit card. We have allowed advertising companies to make us feel we have to keep up appearances by showing us lifestyles way above 'normal' but presenting them as the norm. What about ads where you are expected to be ashamed of your mobile? I will never forget the one that actually said that will 'make the neighbours jealous' - I wouldn't spend on any of those things out of principal.

Even so we are still making choices here - the other side of the coin as others have said, is where you are forced into debt by circumstances beyond your control, or enticed into debt with offers of a quick fix for a money problem. Where people don't fully understand the terms offered etc. I once took a loan with a delayed repayment start of three months - what I hadn't realised was that the repayments were being added to the loan and interest charged on all of it. I did fight that one and got a new loan on better terms - but then I had the ability to understand what had happened. The point being that I wasn't given the full information before accepting the loan.

Thriftylady

I agree that banks etc do use forceful, predatory tactics, some of which are shameful. e.g. I have a friend, already in financial difficulties, who signed up to a new credit card in the local shopping centre because she had her 4 year old with her and the salesperson spoke to the child and said "if mummy signs this form, you can have this teddy bear, wouldn't that be lovely?". Cue lots of begging from the 4 year old. When I found this out it was a few months later, otherwise I would have been pushing my friend to make some sort of formal complaint, I mean surely selling debt to a parent by targetting the child can't be legal ? But nonetheless, my friend knew the consequences and took them anyway, and to her this was a convenient excuse as to why the debt wasn't her fault. But its a parents responsibility to say no to a child in the right circumstances, which this certainly was. So who is at fault - the bank for their despicable sales tactics or my friend for being weak? Surely its both ?

As for banks knowing that borrowers won't be able to repay the money they've borrowed, its just not as simple as that. To a large degree, banks rely on the customer telling them what their income and outgoings are. They might ask for a payslip or two, or a months bank statements or whatever, but its easy to lie, I know I've done it when things were tough. You say you have one credit card when you actually have three. Or you have current accounts with several different banks and shuffle the money around to make it look like theres more of it. Its not necessarily deliberate dishonesty that drives people to lie about their debt, its desperation, and thinking ' if I could just get this one last loan/credit card/overdraft then I could get back on my feet'. There are frequent posts on the DFW boards from people who are distressed because they are in difficulties and their bank won't, for example, let them consolidate the debt, forcing them to consider less reputable lenders, but there are equally frequent posts from those who say that when they got into difficulties their bank lent them more and should have known not to. I don't know what the answer is to all of this, I suspect there isn't one. Some people can borrow money on a tiny income and budget accordingly to pay it all back. Some people can earn hundreds of thousands a year and borrow so much they are unable to pay it back. Thats why each individual has to take responsibility for themselves and be their own safety net - no one in life is looking out for us (least of all big businesses like banks), we can only look out for ourselves. Does anyone take on a debt knowing from the start that they have no hope of repaying it? if the answer is 'no', then how would we expect someone else to know on our behalf? and if the answer is 'yes' then its pretty much fraud, which is a whole other issue.

david_hellier

It's 50-50. The banks have a shared responsibility to lend to people they think can handle the debt. Banks are 50% responsible for this country's personal debt problem.