Post by elynurmarie on Apr 15, 2010 13:54:38 GMT -5
Social x Economic
As we know, the cost of branded goods aren't cheap. Youths even choose to shop at high-end boutiques rather than flea markets/night markets. They usually choose to do this as they feel embarrassed to shop at low class areas. As they choose to do so, they may actually be spending two to three times more then they should. This may lead to them using credit to buy their things. This may lead to overspending, and if they are not careful, bankruptcy. This may in turn affect credit card companies and banks, which may in turn affect the economy adversely.
In an article by Gary Pinnell of Highlands Today, the year 2009 experienced 88 percent more bankruptcy filings than in year 2006. In America, 1.07 million people filed for bankruptcy last year, up 31 percent from 2007. Gary Gosset Jr., a bankruptcy attorney even said, "This is the first time I've seen people so broke they can't even afford to hire an attorney to file Chapter 7 bankruptcy."
Also, Financial Edge posted an article highlighting the top five reasons why people go bankrupt.
1. Medical expenses
2. Job loss
3. POOR/EXCESS USE OF CREDIT
4. Divorce/Separation
5. Unexpected expenses
The excess use of credit definitely makes it to the top 3. Some people, especially the young, do not know how to control their spending. Most people want to live a life of luxury. This makes them turn to credit for help when they have no money. Most people tend to splurge at things that will satisfy them such as branded goods and so on. Credit card bills, installment debts, car and other loan payments can eventually spiral out of control, until finally the borrower is unable to make even the minimum payment on each type of debt thus forcing banks to declare them bankrupt.
As we know, the cost of branded goods aren't cheap. Youths even choose to shop at high-end boutiques rather than flea markets/night markets. They usually choose to do this as they feel embarrassed to shop at low class areas. As they choose to do so, they may actually be spending two to three times more then they should. This may lead to them using credit to buy their things. This may lead to overspending, and if they are not careful, bankruptcy. This may in turn affect credit card companies and banks, which may in turn affect the economy adversely.
In an article by Gary Pinnell of Highlands Today, the year 2009 experienced 88 percent more bankruptcy filings than in year 2006. In America, 1.07 million people filed for bankruptcy last year, up 31 percent from 2007. Gary Gosset Jr., a bankruptcy attorney even said, "This is the first time I've seen people so broke they can't even afford to hire an attorney to file Chapter 7 bankruptcy."
Also, Financial Edge posted an article highlighting the top five reasons why people go bankrupt.
1. Medical expenses
2. Job loss
3. POOR/EXCESS USE OF CREDIT
4. Divorce/Separation
5. Unexpected expenses
The excess use of credit definitely makes it to the top 3. Some people, especially the young, do not know how to control their spending. Most people want to live a life of luxury. This makes them turn to credit for help when they have no money. Most people tend to splurge at things that will satisfy them such as branded goods and so on. Credit card bills, installment debts, car and other loan payments can eventually spiral out of control, until finally the borrower is unable to make even the minimum payment on each type of debt thus forcing banks to declare them bankrupt.