More than a million people are on the brink of serious debt difficulties

ZTD

nelly wrote: »

A minority have bad luck like illness etc but the majority simply dont think things through whilst watching the norton finance adverts on tv

Now, I'm curious as to where you managed to get the figures for this. You seem to have decided what is in the minority, and what is in the majority - though you seem unable to provide any percentages for that.

It's not all that hard to interview people as to why they went bankrupt - this is a book written by two American women about American bankruptcies, where they did exactly that. I'm glad you've taken a leaf out of their book, and done it for the UK population.

Would you like to reveal your original research, and we can compare it with their's?

As Elizabeth Warren and Amelia Tyagi note in their book, The Two-Income Trap: Why Middle-Class Mothers & Fathers Are Going Broke, having a child is now "the single best predictor" of bankruptcy. "

I'm sure there's ways of curbing that indicator.

MJ.com: Even so, there still seems to be this perception that families are only going bankrupt because they're splurging on frivolities.

AT: [Laughs] Yes, there's this great myth out there that we call the "Over-consumption Myth," which goes: If you earn a decent income, and you're in trouble financially, it must be because you're blowing all your money at the Gap, and TGIF. The myth is so powerful, it almost seems like heresy to question it. But when we actually looked into the data on what real families actually spend, it's just not true. An average family of four actually spends less on clothing than their parents did a generation ago, adjusted for inflation. That includes all the Tommy Hilfiger sweatshirts and all the Nike sneakers. How does this work? Well we forget all the things we don't spend money on anymore -- how many kids have leather shoes for Sunday school anymore? How many people dress up in wool suits for work everyday?

If you read the whole book (and I have) you'll find out the major causes of bankruptcy are: Divorve, childbirth, sickness (work aspect), jobloss and healthcare costs (probably US only).

Spending until the bank breaks is a very small percentage (less than 5% IIRC) - certainly not the "majority".

Do you have original data to back up your assertions? If not, please remember to salute when being shot down in flames.

Pobby

Very interesting link ZTD,thanks.Having said that tho I still know a number of people borrowing money for ``things``.One nephew I have is,including interest,in debt to £24,000!He is eighteen years old.All spent on a whizzy car.When I tried to talk him out of it I got nowhere.His parents are grossly materialistic as is his brother and sister.

ZTD

Pobby wrote: »

Very interesting link ZTD,thanks.Having said that tho I still know a number of people borrowing money for ``things``.One nephew I have is,including interest,in debt to £24,000!He is eighteen years old.All spent on a whizzy car.When I tried to talk him out of it I got nowhere.His parents are grossly materialistic as is his brother and sister.

I wouldn't deny that at all. Most borrowing goes on things - whether a house or whatever. The question is more "Will he end up bankrupt?"

Pobby

If he keeps his 20k a year job possibly not.

System

All interesting stuff, but as I will be a first time buyer when Ive paid mi debt off, Ive got a keen interest in this.. Ive seen the 13 year cycle graph, but would be intersting to see what other people think.

southernscouser

lennymfo wrote: »

All interesting stuff, but as I will be a first time buyer when Ive paid mi debt off, Ive got a keen interest in this.. Ive seen the 13 year cycle graph, but would be intersting to see what other people think.

I wanna buy next year mate and I ain't got a scooby!

All I know is 10 years ago my nans house was worth a quarter of what it is now!

Even if interest rates are 15% surely it would have been cheaper to buy then!

I really don't get why people say 'now is the best time to buy'! :undecided

ZTD

southernscouser wrote: »

I wanna buy next year mate and I ain't got a scooby!

All I know is 10 years ago my nans house was worth a quarter of what it is now!

But how much is it going to be worth in the future. Anyone can see the past - it's the future that's of interest.

southernscouser wrote: »

Even if interest rates are 15% surely it would have been cheaper to buy then!

Cheaper - but could have gotten a mortgage? There's also credit standards to bear in mind.

Sell when no one wants to sell, buy when no one wants to buy. Easy as that...

southernscouser wrote: »

I really don't get why people say 'now is the best time to buy'! :undecided

Because they have something to sell.

System

Good I like it, Sell when no one wants to sell, buy when no one wants to buy. Easy as that.

Richard_S

oscar52 wrote: »

errrm if the dollar is at just over $2 to the pound then obviously thats higher than it was previously at $1.8 to the pound

Hi oscar,

If you could buy 1.8 Mars Bars for a £1 last week and 2.0 Mars Bars for a £1 this weeek, the price of Mars Bars has dropped; or fallen; or lowered in price.

Same with the Dollar, you get more for your £1 The Dollar is at a 15 year low against the £1, therefore it's value has dropped.

Richard

Gemmzie

Pobby wrote: »

What Gemmzie says really worries me!History has showed that since the last world war the median for interest rates has been pitched a little over 8%.Half a percent is rise is still a goodly bit below that figure.Honestly people,how many did think interest rates would remain at very low levels forever?

I suppose that more senior members of the forum such as myself and rog2 remember clearly the pain that recession caused in the early 90`s.The mantra of ``the government won`t let it happen``is about the most niave rubbish I have heard.

http://www.creditaction.org.uk/debtstats.htm pretty much spells it out.

It's true unfortunately, mainly due to my father being a total idiot when it comes to finance and my mother trusting him for the past 22 years. Where he got this "knowledge" is anybody's guess


I think a lot of the problem around here is that wages are crappy and housing costs are high - so what else can people do but borrow? Then interest rates rise and their carefully laid out budget no longer stretches.

People live to their means, who here can honestly say they live within reasonable means of their salary like 60% and can call the rest disposable?