My family came to the States from another country decades ago. My parents never bought lunch at work – they brown bagged it every day. We never ate out at a restaurant – totally unheard of in the 70s. There were 7 of us in a 3 bedroom/1 bath house (bath on the 2nd floor for goodness sakes). People will rent and buy bigger because those are the conveniences that they think they are entitled to have in life. We lived in NYC and didn’t need a car, but the first car was some sad looking leopard print (from the home mechanic knock out the dents we didn’t paint it job) vehicle. My parents were happy to have a car, not go into debt to buy a new car.

Spending habits have CLEARLY changed. I look back and wonder how we survived, but we did. People go into debt (or spend more than they should) over a sense of entitlement versus what they can afford.

While a lot of folks filing are due to medical bills, there is that faction that don’t even want to try. I know someone that has lots of old things on her report and her solution was to file bankruptcy to clear them.

I was just communicating with someone about their choice to sign up with a debt settlement company as it was her right to not pay what she owed. I was just taken aback by the attitude (and encouraging others to do the same) of stick it to the banks (which also means all of us). I am sure they didn’t have that attitude when they were spending borrowed money.

There are people that will fight tooth-n-nail to keep their home. Then there are folks that walk away because they were too under water on the house loan (their rate didn’t go up and they had money to pay their mortgage). I know one of them – the loan was in his name. He and his family walked away and bought a new build home within a year about a mile away in the wife’s name – just as big and loading up with all the stuff they had at the old house: pool. etc.

Have any statistics to support that? Or is it just your opinion?

The biggest problem with credit cards is that there is no cap on interest rates. Credit card interest should be capped at a decent rate that still gives the cc companies room to charge low rates to reward people for paying on time, and to raise rates if someone is habitually late, but not so much that it would make it impossible for them to pay the debt off.

@Khaleef @KNS Financial: It is a myth that this country is full of out of control spendthrifts. The majority of families spend a full three quarters of their income on rent/mortgage, car payments, insurance, and tuition. People are spending less on food, less on clothing, and less on household appliances than they did forty years ago. It is just not true that we’ve developed an insatiable desire for debt. However, most families walk the tightrope and one misstep could send them tumbling down into financial disaster.

Furthermore, once again, the number one reason people go bankrupt is medical bills. And the majority of these folks have medical insurance!

Of course not everyone in financial trouble falls into this category, but the majority of them do!

However, the judgment is a mere formality, because if you go to court regarding the judgment, the judge will likely ask you if the debt is yours or if there was an error.

If the debt is yours and there was no error, but you have simply lost your ability to pay, even if you intend to pay eventually, the judge has no recourse but to allow the credit card company the right to access your account, as they choose, when they choose.

Personally, I don’t think that they should have the right to take your rent money or grocery money, even if you’re morally and legally obligated to pay them back.

Should a person and their family starve and/or lose their housing in order to pay their credit card when they’ve hit hard times? I don’t think so.

Even good debt is a substantial risk, as investments are known to fail. But those who take on those risks at least know what they’re doing, I’m sure. The majority of people seem to fall into bad debt though, which is used to buy doodads, a home to live in, college education.. That’s bad. Very bad.

But to answer your question, I think it’s rightful to judge those who fall into bad debt. I mean.. I do it all the time. Haha..

But I think it’s important to gauge individual cases. I know a lot of people who had been targets of faulty collections and even lawsuits of things that were either beyond trivial or not even their debt at all!