Serious Credit Debt Problem
Q: Citizens Advice reveals today the average person coming to them for help owes some ??13,153 - a sum of money that would take 77 years to pay off at a rate they can actually afford. This sum is up by almost a third compared with three years ago, and is equivalent to 17-and-a-half times their monthly household income. And as well the amount owed, the number of people in trouble is increasing. In the last eight years the number of people with consumer credit debt problems coming to Citizens Advice has doubled, with close to a million cases recorded in the last year. http://www.myfinances.co.uk/news/loans/bankruptcy-advice/problem-debt... The average person has just ??27 a week left to live on after meeting all their bills and essential outgoings, a survey has showed. Recent rises in council tax and utility bills, combined with high levels of debt, have left the average Briton with ??954 worth of monthly commitments to pay from an average income of ??1,070, according to Combined Insurance. The group said around 89% of people's pay was already committed to bills, debts and essential living costs before it even hit people's bank accounts. Unsurprisingly, the biggest monthly commitment people face is their mortgage, with homeowners paying an average of ??450 a month each towards their home loan. But people also have to find around ??152 a month for debt repayments on credit cards, loans and store cards. On top of this people also need ??153 each month to meet the cost of gas, electricity and water bills and council tax. Other monthly commitments include the cost of running a car, telephone bills, child care and insurance. any information or ideals?
A: _I have always lived on a low income so I know that it was always hard to get credit, until (IME) Bliar won his second term. Suddenly it was all unleashed and even unemployed people with no income could borrow thousands. I would like to know, why the change of tack by the banks? Why lend money to people knowing that you will probably never get it back? It was probably a good tactic for stimulating the economy as the borrowed 'money' was used to buy goods (even if it was only food and petrol!), but it makes no sense to me at all that people with no income and little chance of paying loans back should have it thrown at them in the way that it has been. The only way it would make sense as a policy, is that the majority will want and try to pay it back, and so will work double hard to make sure they get enough money to repay. Sounds a bit foil-hattish though _What is needed is a modern version of the workhouse to be reintroduced. I do not find this "instant bankrupcy" route at all justifiable. Time was when being a bankrupt was on a par with a sex offender. Now it seems anyone can get into enormous debt, then just shrug and walk away. Britons owe one trillion pounds. Does that not make Britain far from being the fourth-largest economy, but more on a par with the worst third-world country? _I think a lot of them are getting into unmaneageable debt because they use credit cards to pay for food and petrol. What takes a month to spend takes years to pay back. I think the actual level of the cost of living is partly masked by this - credit card sepnding makes it appear that people have some disposable income to spend on luxuries, when many are actually struggling to pay for the very basics (from observation of people I know in this situation). Bankruptcy used to be considered harsh because it meant that you had assets taken and it took years to get clear. .
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