Footy creates bankruptcy
November 6th 2008 04:34
There is a debt crisis amongst young people. The buy now, pay later culture promoted by retailers and lenders is impacting heavily on those consumers with the least experience of credit and debt.
Forty one per cent of all debt agreements are signed by people under the age of 30. A debt agreement is a low cost alternative to bankruptcy that more and more people are being forced to undertake.
The number of people declaring themselves insolvent and unable to repay their debts has surged and young people are the most likely to fail with credit and managing their finances. People aged 25 – 29 are the most likely to find themselves in trouble with consumer debts like credit cards, mobile phones and loans according to the Insolvency Trustee Service of Australia.
Young people aged 15 - 25 are also over represented in the latest debtor profile report from ITSA. The number one reason behind the growth in people declaring themselves insolvent and signing up to a debt agreement is excessive use of credit, including repossessions, high interest payments and pressure selling.
“Its phones, it’s cards, it’s loans,” says financial counsellor Jackie Bramwell,
“And it is affecting young people in jobs as well as students, we are seeing a lot of young people in lots of trouble with debt at the moment.”
The second most common reason for being forced into a debt agreement is unemployment or loss of income.
“When the unexpected hits, that’s when young people get in trouble, they just don’t plan for things like illness, injury or loss of employment.
“Footy can be a big cause of debt problems,” says Bramwell, “When a young tradie breaks a leg or gets a serious injury he can be off work for five to eight weeks.
“Usually he’s got not insurance and no more than four weeks holidays and sick leave.”
Jacki Bramwell works for Eastern Access Community Health in the consumer debt heartland of Melbourne’s east. She says young people have grown up in a “have now, pay later” economy.
“They are signing up for store interest free deals of up to five years, who knows where they will be in five years or what their financial situation will be.
Forty one per cent of all debt agreements are signed by people under the age of 30. A debt agreement is a low cost alternative to bankruptcy that more and more people are being forced to undertake.
The number of people declaring themselves insolvent and unable to repay their debts has surged and young people are the most likely to fail with credit and managing their finances. People aged 25 – 29 are the most likely to find themselves in trouble with consumer debts like credit cards, mobile phones and loans according to the Insolvency Trustee Service of Australia.
“Its phones, it’s cards, it’s loans,” says financial counsellor Jackie Bramwell,
“And it is affecting young people in jobs as well as students, we are seeing a lot of young people in lots of trouble with debt at the moment.”
The second most common reason for being forced into a debt agreement is unemployment or loss of income.
“When the unexpected hits, that’s when young people get in trouble, they just don’t plan for things like illness, injury or loss of employment.
“Footy can be a big cause of debt problems,” says Bramwell, “When a young tradie breaks a leg or gets a serious injury he can be off work for five to eight weeks.
“Usually he’s got not insurance and no more than four weeks holidays and sick leave.”
“They are signing up for store interest free deals of up to five years, who knows where they will be in five years or what their financial situation will be.
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