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When might debt pose problems?

Presentation

In economic terms, debts have their most direct negative impact on household living standards when they use up disposable income

  • Debt servicing reduces income available to spend on essential items
  • Other e.g. psychological effects of debt possible

Household is judged to be under "immediate servicing pressure" if either:

  • Spending 25% or more of monthly net income on servicing debts

  OR

  • Two or more payments behind on one or more credit agreement, or bill – “in arrears”