What are the main problems and causes of personal debt in society?
Answers:
One of the main reasons for personal bankruptcy is medical expenses.
The cause is Avarice.
Overspending.
People spend more than what they earn.
Credit is too easy to get & some peopleare too greedy and und up living beyond their means.
Credit Cards.
Living beyond, one's means.
spending more than you make
people with ideas above their financial station!
peoples obsession with material possessions
people living well above their means with a, 'I've got to have it now!' mentality!
Problems, not many. The biggest cause of debt from personal experience is the lack of pay rise's in the last 3 years and the explosion of council tax, petrol, gas, electric, food etc etc. The harder you work in this country the worse off you seem to get. (UK)
Causes - greed for material things that you can't actually afford ie overextending yourself.
Problems - many!
relationship breakdown
change in employment/ earning power
ill health
over commitment
pay not keeping pace with cost of living
fixed incomes
too many children or as in my case too many pets!
In my opinion, people are encouraged to spend more than they can afford to spend. Sometimes, it's realtors and mortgage brokers who lead people to believe that they can actually afford a larger house with an expensive price tag when in reality they can't. A few years later, the mortgage companies are having to bring foreclosure proceedings against the buyers b/c they simply can't make the mortgage payments. Sometimes, it's credit card companies who encourage people to spend more money, to max out their credit card, when they have no idea how they're ever going to repay the money that they owe. Unfortunately, many people are snared into believing that somehow they can live beyond their means and before it's time to make the first payment that they will be able to pay the money owed; but, many times, that's just not the case, b/c in the meantime, they've incurred other debts in big ticketed items (i.e. major appliances, new vehicles, a vacation home, an elaborate renovation project, an expensive vacation, etc.), and then, when the bills start, they can't make the payments; so, they will make the minimum payment, which will keep them in debt for many years and will keep them paying finance charges + huge interest w/o even making a dent in the principal sum of money that they owe. After awhile, the personal debt becomes so overwhelming that they are literally swimming in debt. @ this point, these people will either turn to declaring bankruptcy or foreclosure (houses) proceedings are initiated or repossession (vehicles) or credit counselors to help them reduce the debt payments that they owe and to manage that debt with affordable payments that will put them out of debt completely in a few years.
The main cause is people not being paid enough to cover the cost of living.The spiralling price of housing the first thing on most families budget coupled with low interest rates have fooled many into over stretching their finances. Now with the inevitable rise in interest rates a lot of them are in trouble. The present ridiculous price of property cannot be sustained and many will find themselves in negative equity.The only ones to profit from the present crazy house prices will be the mortgage lenders and estate agents.
(a) Not having enough money to buy what you either need or want
(b) Borrowing money to buy what you either need or want.
Capitalism thrives on debt. It persuades us that we "need" the latest piece of consumer trash to make our lives complete - fashion clothes, new cars, gadgets etc.
Example: Our TV is about 8 years old and fairly "outmoded" but so what it works well and we can't afford another. However, I am sick of people making jokes about how "out of date" it is and why don't I get a flatscreen etc. Umm because I can't AFFORD it and I don't need it! However if I was to buy into this stupid pressure I could go out and get myself into debt buying a TV that is not really much different to the one we have (shows the same programmes) just more "modern".
Loan companies and Credit Card companies make money from persuading us to borrow from them (interest, charges etc). Stores make money from persuading us to spend this money on their goods. Debt Collectors and Bailiffs make money from harrassing us when we can't afford to pay. If everyone stopped borrowing a lot of people would be out of a job!!
Other causes of debt are: unemployment, illness etc (people borrowing money to live on), people trying to buy a house and the fact that wages are way too low and have no kept up with the rise in the cost of living.
Greedy bastards
Personal over spending and not cutting your coat according to your size
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