Boom time for debt, too
It may sound strange at first, but thanks to the muscular economy, Americans are carrying debt like never before.Skip to next paragraph
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"The robust economy and heady gains in the stock markets are giving people a false sense of security about their ability to handle debt," says Steve Rhode, president and co-founder of Myvesta.org, formerly Debt Counselors of America.
People denied mortgages because of bad credit increased 21 percent from 1998 to 1999, according to the Federal Financial Institutions Examination Council in Washington. Denials because of high debt-to-income ratios increased 25 percent during that period.
Credit-card debt is a major contributor, with the average American household balance reaching $7,564 in 1999. That's up $4,579 from 1990.
Despite the hefty credit-card debt, Mr. Rhode notes that "people still go out and get mortgages that are too big and cars they can't afford."
This behavior is forcing many Americans into bankruptcy. Bankruptcies are expected to top the 1 million mark for the fifth consecutive year in 2000.
To help those considering bankruptcy, the Financial Assistance Network (800-940-9048, www.FinancialAssistanceNetwork.org) offers a debt kit that helps consumers combine bills into a monthly payment, apply for a debt settlement, and form a personal debt-reduction plan.
(c) Copyright 2000. The Christian Science Publishing Society