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Musings on debt
Jul. 2nd, 2006 11:26 pmBecause I was the sensible person and watched Panorama (not an excuse to lay on the sofa and whinge, honest) and it was doing a segment of personal debt and people getting in trouble.
To be honest, I have a lot of irritation about people who get in debt. My cousin is classic. He is in debt, lots of debt. He bought a new car - he decided to buy something odler so he could get something flashier. It broke down. He bought a new car - also flashy. He buys designer clothes, he goes out drinking 4 nights a week (and never spends less than £50), he buys his 3 year old niece trainers that cost £45 (which is ludicrous in an of itself) and he complains constantly about his vast debt.
I have precious little sympathy for him. Or for his mother who took out a loan to go on a second holiday in the same year. They just annoy me for being so frustratingly short sighted.
So when I look at someone with an income of £15,000 a year and unsecured debts of £40,000+ my first instinct is to scream "you fool" and hit them with a haddock. Sure, sometimes it's legitimate - students, divorcees or various other tragedies can afflict you, but usually that's going to be spending above your means.
But the flip side is this - OK, someone who spends £40k+ while on a £15k income is a fool.
But what does that make the lending institution that gives them the money? They must be at very least blithering idiots - they're financial experts after all! I remember when I was a student - I was offered credit cards daily. if I had applied for them all I could probably have had a credit limit in excess of £20,000. My cousin is still offered credit cards from the same company he is technically defaulting to.
So, I'm not inclined to give the overspenders a lot of good will - but laws to help protect the lenders? Make bankrupcy harder? No, I don't agree. They're quite capable of spotting a dangerous loan. They know when someone's entering into more debt than they can afford. If they continue to lend then they have only themselves to blame when they get burned in a bankrupcy.
To be honest, I have a lot of irritation about people who get in debt. My cousin is classic. He is in debt, lots of debt. He bought a new car - he decided to buy something odler so he could get something flashier. It broke down. He bought a new car - also flashy. He buys designer clothes, he goes out drinking 4 nights a week (and never spends less than £50), he buys his 3 year old niece trainers that cost £45 (which is ludicrous in an of itself) and he complains constantly about his vast debt.
I have precious little sympathy for him. Or for his mother who took out a loan to go on a second holiday in the same year. They just annoy me for being so frustratingly short sighted.
So when I look at someone with an income of £15,000 a year and unsecured debts of £40,000+ my first instinct is to scream "you fool" and hit them with a haddock. Sure, sometimes it's legitimate - students, divorcees or various other tragedies can afflict you, but usually that's going to be spending above your means.
But the flip side is this - OK, someone who spends £40k+ while on a £15k income is a fool.
But what does that make the lending institution that gives them the money? They must be at very least blithering idiots - they're financial experts after all! I remember when I was a student - I was offered credit cards daily. if I had applied for them all I could probably have had a credit limit in excess of £20,000. My cousin is still offered credit cards from the same company he is technically defaulting to.
So, I'm not inclined to give the overspenders a lot of good will - but laws to help protect the lenders? Make bankrupcy harder? No, I don't agree. They're quite capable of spotting a dangerous loan. They know when someone's entering into more debt than they can afford. If they continue to lend then they have only themselves to blame when they get burned in a bankrupcy.