17-02-2013, 12:40 PM
Don't gamble and speculate recklessly! This technician managed to lose $300,000 in an upward trending market, I suspect due to contra and margin losses!
The Straits Times
www.straitstimes.com
Published on Feb 17, 2013
More people declared bankrupt
After downward trend for 7 years, figure rose by 14.5% last year; experts blame inflation for the rise
By Theresa Tan
After seven years during which it fell steadily, the number of people made bankrupt swung upwards again last year.
While the strong economy and a debt repayment scheme helped push individual bankruptcy orders down from a peak of 4,553 in 2004 to a low of 1,527 in 2011, the orders rose by 14.5 per cent to 1,748 last year.
No reasons were given by the Insolvency and Public Trustee's Office (IPTO) for the increase, but financial advisers, lawyers and counsellors who deal with bankrupts had some ideas about it.
More people might be finding it hard to keep up with their expenses even though they have jobs, as inflation has soared in recent years. Working-class families might turn to credit cards to get by and find themselves in trouble when they cannot pay what they owe.
A typical example is a renovation contractor counselled by Mr Leong Sze Hian, past president of the Society of Financial Service Professionals. The man in his 30s was made bankrupt for charging $6,000 to credit cards "to make ends meet" as he had an irregular income. He went under when his debt snowballed to more than $10,000.
Also, given the solid economy and sizzling property market of late, more Singaporeans may be feeling flush and spending beyond their means, said Credit Counselling Singapore's president Kuo How Nam.
More people may also be getting into gambling debt, especially with the opening of the two casinos in 2010, counsellors noted. There are signs that increasing numbers may be in financial distress.
One is the burgeoning amount on rollover credit card balances - the amount unpaid which usually incurs interest of 24 per cent per annum - which shot up by almost 50 per cent from $3.4 billion in 2008 to $5 billion last year.
Another is the growing credit card bad debt being written off. This nearly doubled from $115 million in 2008 to $227 million last year, data from the Monetary Authority of Singapore (MAS) shows. To prevent people from spending beyond their means, MAS proposed changes to rules on credit cards and unsecured credit last December.
According to IPTO, the top three reasons for bankruptcy are over-spending, business failure and unemployment.
About seven in 10 bankrupts have claims of less than $200,000 against them. Most are in the 31 to 50 age range and the good news is that the proportion of bankrupts just starting out in life has shrunk.
The share of bankrupts between 21 and 30 years old has fallen steadily in the last four years, from 14 per cent of all bankrupts in 2009 to 9 per cent last year.
Lawyer Adrian Peh, who handles insolvency cases, said one reason could be that younger people tend to have smaller debts, which qualifies them for the Debt Repayment Scheme. In 2009, the Government started the scheme, for employed people with regular incomes and debts of less than $100,000. A plan is made to help them to repay their debts within five years.
An IPTO spokesman told The Sunday Times about 700 people have been put on the scheme since 2009. Without it, they would have been declared bankrupt.
There were 24,895 undischarged bankrupts at the end of last year.
Johnny (not his real name), a 43-year-old technician, was declared bankrupt last year after he lost about $300,000 by speculating in stocks and chalked up about $260,000 in debt. He eventually borrowed from licensed moneylenders, at interest rates of up to 30 per cent per month.
Married to a factory worker with no children, Johnny said the moneylenders hounded him every day at his workplace. And he was forced to quit his previous $3,500-a-month job as his boss told him to either resign or get the sack. He said: "The high interest rates really killed me."
theresat@sph.com.sg
------------------
The Straits Times
www.straitstimes.com
Published on Feb 17, 2013
Charity helps debtors repay their loans
Her gambler ex-husband left her depressed with his womanising and saddled her with $140,000 in debt. At her lowest point, Joey (not her real name), a 50-year-old secretary, did not even have enough money to pay the electricity bills. She tried repeatedly to end her life.
The mother of three boys said: "When a woman is in love, she is very blind. He didn't support our family and was constantly asking me for money. I would do anything to help him. Later I found out he was gambling at casinos and flirting with other women."
She borrowed for her bankrupt husband on eight or nine credit cards, using one loan to pay another, without realising how much she was racking up in interest. For five years, she coughed up $2,000 to $3,000 in monthly interest payments alone, and her debt kept snowballing.
Last year, she found a lifeline at Credit Counselling Singapore (CCS) after her sister told her about the charity. It helped her negotiate with the banks she owed a much lower interest rate, from 24 per cent a year to 3 per cent. Joey, who is not a bankrupt, now pays $1,400 a month to her creditors - a sum she finds more manageable.
She said: "I feel the CCS has saved my life and given me hope." Without the CCS, more debtors would face the threat of insolvency, said its president, Mr Kuo How Nam. The CCS helps debtors negotiate with all their creditors for a significantly lower interest rate and to extend their repayment period, thus making it easier for them to repay their debts. And once they keep to their payments, the banks are unlikely to sue them for bankruptcy, he said.
Last year, the CCS saw a 47 per cent spike in clients, from 1,090 in 2011 to 1,605. The increase is likely due to more people facing financial woes and greater awareness of the charity's work, he said.
People fall into debt for reasons such as overspending, unemployment or pay cuts, medical bills and gambling debts. They had an average income of $3,450 and an average debt of about $80,000 last year.
Theresa Tan
The Straits Times
www.straitstimes.com
Published on Feb 17, 2013
More people declared bankrupt
After downward trend for 7 years, figure rose by 14.5% last year; experts blame inflation for the rise
By Theresa Tan
After seven years during which it fell steadily, the number of people made bankrupt swung upwards again last year.
While the strong economy and a debt repayment scheme helped push individual bankruptcy orders down from a peak of 4,553 in 2004 to a low of 1,527 in 2011, the orders rose by 14.5 per cent to 1,748 last year.
No reasons were given by the Insolvency and Public Trustee's Office (IPTO) for the increase, but financial advisers, lawyers and counsellors who deal with bankrupts had some ideas about it.
More people might be finding it hard to keep up with their expenses even though they have jobs, as inflation has soared in recent years. Working-class families might turn to credit cards to get by and find themselves in trouble when they cannot pay what they owe.
A typical example is a renovation contractor counselled by Mr Leong Sze Hian, past president of the Society of Financial Service Professionals. The man in his 30s was made bankrupt for charging $6,000 to credit cards "to make ends meet" as he had an irregular income. He went under when his debt snowballed to more than $10,000.
Also, given the solid economy and sizzling property market of late, more Singaporeans may be feeling flush and spending beyond their means, said Credit Counselling Singapore's president Kuo How Nam.
More people may also be getting into gambling debt, especially with the opening of the two casinos in 2010, counsellors noted. There are signs that increasing numbers may be in financial distress.
One is the burgeoning amount on rollover credit card balances - the amount unpaid which usually incurs interest of 24 per cent per annum - which shot up by almost 50 per cent from $3.4 billion in 2008 to $5 billion last year.
Another is the growing credit card bad debt being written off. This nearly doubled from $115 million in 2008 to $227 million last year, data from the Monetary Authority of Singapore (MAS) shows. To prevent people from spending beyond their means, MAS proposed changes to rules on credit cards and unsecured credit last December.
According to IPTO, the top three reasons for bankruptcy are over-spending, business failure and unemployment.
About seven in 10 bankrupts have claims of less than $200,000 against them. Most are in the 31 to 50 age range and the good news is that the proportion of bankrupts just starting out in life has shrunk.
The share of bankrupts between 21 and 30 years old has fallen steadily in the last four years, from 14 per cent of all bankrupts in 2009 to 9 per cent last year.
Lawyer Adrian Peh, who handles insolvency cases, said one reason could be that younger people tend to have smaller debts, which qualifies them for the Debt Repayment Scheme. In 2009, the Government started the scheme, for employed people with regular incomes and debts of less than $100,000. A plan is made to help them to repay their debts within five years.
An IPTO spokesman told The Sunday Times about 700 people have been put on the scheme since 2009. Without it, they would have been declared bankrupt.
There were 24,895 undischarged bankrupts at the end of last year.
Johnny (not his real name), a 43-year-old technician, was declared bankrupt last year after he lost about $300,000 by speculating in stocks and chalked up about $260,000 in debt. He eventually borrowed from licensed moneylenders, at interest rates of up to 30 per cent per month.
Married to a factory worker with no children, Johnny said the moneylenders hounded him every day at his workplace. And he was forced to quit his previous $3,500-a-month job as his boss told him to either resign or get the sack. He said: "The high interest rates really killed me."
theresat@sph.com.sg
------------------
The Straits Times
www.straitstimes.com
Published on Feb 17, 2013
Charity helps debtors repay their loans
Her gambler ex-husband left her depressed with his womanising and saddled her with $140,000 in debt. At her lowest point, Joey (not her real name), a 50-year-old secretary, did not even have enough money to pay the electricity bills. She tried repeatedly to end her life.
The mother of three boys said: "When a woman is in love, she is very blind. He didn't support our family and was constantly asking me for money. I would do anything to help him. Later I found out he was gambling at casinos and flirting with other women."
She borrowed for her bankrupt husband on eight or nine credit cards, using one loan to pay another, without realising how much she was racking up in interest. For five years, she coughed up $2,000 to $3,000 in monthly interest payments alone, and her debt kept snowballing.
Last year, she found a lifeline at Credit Counselling Singapore (CCS) after her sister told her about the charity. It helped her negotiate with the banks she owed a much lower interest rate, from 24 per cent a year to 3 per cent. Joey, who is not a bankrupt, now pays $1,400 a month to her creditors - a sum she finds more manageable.
She said: "I feel the CCS has saved my life and given me hope." Without the CCS, more debtors would face the threat of insolvency, said its president, Mr Kuo How Nam. The CCS helps debtors negotiate with all their creditors for a significantly lower interest rate and to extend their repayment period, thus making it easier for them to repay their debts. And once they keep to their payments, the banks are unlikely to sue them for bankruptcy, he said.
Last year, the CCS saw a 47 per cent spike in clients, from 1,090 in 2011 to 1,605. The increase is likely due to more people facing financial woes and greater awareness of the charity's work, he said.
People fall into debt for reasons such as overspending, unemployment or pay cuts, medical bills and gambling debts. They had an average income of $3,450 and an average debt of about $80,000 last year.
Theresa Tan