I have worried for the longest time about credit ratings. There are many good reasons for my fears.
To begin with, credit ratings are based solely on mathematics – the days in arrears. You are judged in a moral way by being labeled with a good or bad rating. The reason for your problems doesn’t matter. Just the days in arrears.
Yesterday the boiling hot news of the day was a 25% interest bearing car loan to a BC couple. The story involved the TD bank and a family that had gone bankrupt recently. It raises a number of troublesome questions.
Part 2
We began Part 1 with the above question, how much debt can we handle? $25,000? $50,000? $100,000?
Part 1
Trans Union, one of the largest Credit Reporting Agencies in Canada, released a report this week informing the public that debt levels are rising, but we are managing okay. Sounds good, but, what does it mean?
The short answer: I don’t know.
How much debt people can handle, manage, or afford is really quite complex. Is it $25,000? $50,000? $100,000?
October 28, 2013
By Margaret H. Johnson
It’s Halloween and it’s time to get scared again. But I have something much more frightening than ghouls, Frankenstein or vampires. Yes, indeed. Zombie debts can fly out of the darkest caves and scare you into an appointment with a lawyer. Can anything beat that?
A zombie debt is a debt that has died but keeps coming back to life. There are all kinds of them. It could be a forgotten dental bill or an old Visa balance.
October 11, 2013
By Margaret H. Johnson
A recent article in the Vancouver Sun about older Canadians slipping deeper into debt should not come as a surprise. As a retired colleague of mine, the former Director of Debtor Assistance in British Columbia, Douglas Welbanks, said, “The baby boomers invented debt.”
He quickly admitted this was not exactly true, “It was the baby boomer era in which consumer credit took off – beginning with finance companies and the poor in the 1960s, evolving to retail merchant and bank credit cards in the 1970s. By 1990 the middle class was pretty much drifting into trouble with over $100 billion in consumer debt with more or less universal bank credit cards like Visa and Mastercard.”
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