How many of you are really in Debt?

Question

I've been reading all these articles about people trying to get out of debt because they can never pay off their credit card balance, people living paycheck to paycheck, or those that doesn't have enough savings for their retirement.

Just wondering how many of you out there are really this much in trouble? If you don't gamble and use your money wisely, poeple should be able to save. I'm lucky to say I don't know anyone this much in trouble yet. So, is media just exaggerating?

Answer 1

well i am a loan officer so i deal with the finances of many people who are in trouble and need help. And i can attest through personal experience tha it is absolutely true. 95% of the clients i deal with are in a considerable amount of debt! and they are trying to fix it by refinancing but often times cannot because of the way the market is. and just so you know everything that the media is talking about when it comes to losing homes is true as well. i sadly am not able to help and deal with way too many people who are losing there homes. the main reasons why this is happening is people are not being smart about there money. they are not spending it wisely. they either get more than they can afford not allowing themselves enough money to go beyond getting by so as soon as bad times hit they are in the whole. and some people are just irresponsible. i worked with one person who made 7 thousand a month and only had four thousand in bills but still would be missing payments. and i actually was going to be able to signigicantly decrease his debt and get him on the right track. all he had to do is send me one sheet of paper and the deal was done. yet he didnt i kept calling for two weeks and he would not answer. Three months! later he calls me and tells me hes ready to do it and he really needs the money i was going to give him because his daughter is going to school. so i said ok i was ready three months ago but no problem lets do it now. i reran his credit and it turned out that he was 3 months late on a payment and was going to lose his house! i remember the very last conversation we had before those three months i told him dont forget to make your payment otherwise this loan is dead. and his words were "c'mon man im not stupid ive learned from this mistake before i alredy made my payment". yet that was the payment that put him in foreclosure. Why simply because he procrastinated on things that should have been a priority. sadly this is only one of so many stories i have. people are just irresponsible. i mean seriously you should never take on a large debt if you cannot easily be able to properly afford it. i hate seeing people lose their homes!

Answer 2

I live paycheck to paycheck, have a little in savings, no retirement plan yet, I have some debt maybe around 4,000 (school, credit cards, not including my mortgage). But my sister is a different story, she probably has 5 or 6 credit cards with more than 3,000 on them and is only making minimum payments on all of them.

Answer 3

The last statistic I saw on the US National Savings rate is that the rate is NEGATIVE 1.7%....which means Americans are spending more than they are saving. No, the media is not exaggerating. There are plenty of people with way too much debt in the US.

And despite what some other foks imply here, they aren't all unsophistated, uneducated hicks from the backwoods. I have helped many professional, college-educated couples construct plans to dig themselves out of massive debt from living beyond their means. Debt can be a problem for anyone.

Answer 4

Yes, actually, I am in debt and I am living paycheck to paycheck. The reason for me seems to be something comes up that I have to pay for. Like something with my car, health insurance rate are going up ect or higher gas prices for my home or the car. So, it's hard to get out of debt and save when you money when you money, when your check HAS to be spend on things that are an everyday need and not really be able to put some aside.

Answer 5

You are very, very lucky - right now. We just finished paying off a huge credit card debt, and now have no outstanding bills. However, not only do we live in a consumer culture - look at the National Debt, for instance - but there are things that come up that can't be paid for immediately - like medical expenses.

Our debt was a combination of medical expenses that were not covered by our medical plan, dental bills (no coverage there), car repair expenses...and credit card fees.

Sometimes ones' income is just not enough to pay for the necessities of life, and credit is used just to get by.

Answer 6

I think the statistic is somewhere around half of all Americans live paycheck to paycheck. It's a vicious cycle. One is born into poverty, lives in poverty, can't get a job that pays enough to get out of the cycle. Some do luck out, or are smart enough to figure it out, but others get stuck in the frame of mind that such is life and don't realize they can do better. And usually the longer it goes on, the more limited choices become. For example: say a person grows up without dental insurance and their teeth start rotting out from an early age, as an adult they get a typical under $10/hr job that doesn't supply dental insurance. They can't get a better job with rotted teeth, but they can't get the problem taken care of. I can go on forever about how the cycle feeds itself.

Answer 7

I'm not, but I know a few friends that just had to have a new house, new car, and all the fixin's... And the bank said they could afford it. The bank was right, as long as nothing changed they could, but that is about all they can afford to do. No vacations, no braces, no out-of-work situations, and definately no kids. So, when one of those things comes up, trouble steps in.

The other problem now is that many houses were valued way too high. Now, to get out of the house, they will most likely have to sell for whatever they owe, even though according to the initial appraisal, they should have at least 20% equity.

All of this spend whatever you want is going to catch up.

Answer 8

I do have debt, but don't live paycheck to paycheck. We (me wife and I) started our Total Money Makeover in August of this year. We started with about $90,000 in debt. (she has student loans from her Master's Degree, and I have student loans and a car.) Following this Total Money Makeover by Dave Ramsey we should be debt free within 3 years. Focused intensity will get it done. We already have all the credit cards done. (It was only about $2,500 but we paid it off in like 2 months.) So no matter how much debt you have, it CAN be paid off. Life does happen, I will agree. But life, I believe, is probably 90% how you react to situations.

Answer 9

Life must be really simple for you, Skippy. Congratulations.

But for many of us, it doesn't take much to go from having a nice little "cushion", to shutting off your cable and internet so you can feed your kids. All it takes is a few months of being unemployed, which in many states isn't that unusual. The home equity loan or credit card balance that seemed so manageable while you were employed suddenly becomes this monster that you are struggling to feed.

Divorce has similar effects to unemployment. (Addictions, including gambling, are a whole different topic.)

Life happens. Your checkbook sometimes suffers. Don't know what to tell ya.

Answer 10

Lets just say that I am 23 years old and have over $20,000 worth of debt and can barely live paycheck to paycheck with my husbands paycheck coming in as well and try to support a 19 month old daughter... My credit score is less than 300 I am sure....Last I checked it was 320....so yes, people really can be in that much debt....