The Crash of Loan Sector

August 6, 2009 by  
Filed under Loan and Credit

The debt overhang is a difficult situation in which a person finds himself unable to pay its expenses (payment of rent, electricity, loans taken …).

The case of debt are now linked to the deteriorating financial and social situation of households in contrast to the period 1990 – 1995 which was the original bank.

There are two types of debt:

_ The debt liability for accidents of life:

• Unemployment
• Low income
• Separation and Divorce
• Sickness and Accident
• Death

_ The debt assets: related to the accumulation of charges, the excess credits without changes in income.
Excessive consumption of credit, personal credit, credit car, reserve money are often the main causes of debt assets.

The debt can often find solutions that in the aggregate redemption of loans taken.
However, the number of requests for redemption of funds is such that the selection is severe. In general, the new debt should not exceed 30 to 35% maximum household income (including rent possible).
The ability to offer a solid guarantee (bond or mortgage) increases the chances of obtaining a credit redemption.