In such a situation, financial institutions that are willing to facilitate the realization of dreams come to the rescue. Of course, funding comes at a price, which can be expressed as a percentage. As long as we can exercise moderation and reason, this is not a problem. However, not everyone knows when to say enough.
A study by the National Debt Register (KRD) of the Economic Information Bureau shows that more than half of Poles (54 percent) are currently repaying loans or borrowings. That’s not bad news yet. This includes zero percent installments for building credit history before a mortgage.
The scale of the real problem can be seen in the failure to pay debts on time. Almost every 11th adult in Poland has unpaid credit and non-credit obligations. More than two million seven hundred thousand Poles cannot cope with paying their debts on time.
What does spiraling debt lead to?
Let’s start with how it all begins, because beginnings are always innocent. Zero percent installments on home essentials, credit card, overdraft, holiday loan. All this raises our standard of living and allows us to shop now, without saving or waiting. It’s so convenient!
It’s true, it’s nice to have something now rather than six months from now. This is how instant gratification works, which releases happy hormones and in turn can becloud rational thinking. As long as the salary is enough to cover the obligations, we do not think about the problem. We reach for more and more – things, services, memories.
However, at some point the problem of over-credit, or taking on debt beyond our means, comes into play. When this happens, problems begin to pile up like a snowball that leads to an avalanche. We don’t want to give up our current standard of living even though we can’t afford it. Installment delays are getting longer and longer, and we desperately grasp at every opportunity to borrow more money to pay off previous debts. So we reach for worse and worse solutions, such as instant loans — as a result of which we are left with even bigger and higher interest debt.
We also try to borrow money from family and friends, but our relationship begins to fade, and the only thing we can count on is a phone call from a collection agency.
Any of us can have a debt problem
It doesn’t matter how much money you make. It can happen to anyone. Be it a rank and file employee, a business owner or a world-class celebrity. There are known cases of athletes who, although they earned hundreds of millions of dollars, still became bankrupt. That’s how lifestyle inflation works, which I discussed in my material on household budgeting.
Sure, you didn’t overextend when buying a new yacht or jet and you have more mundane problems, but the principle is the same. Earnings are greater than costs, but at some point this ratio reverses. No matter the reason.
Of course, I don’t know what happened to you or what your story is. Not everything was under your control. Maybe the company closed down and you lost your job, maybe you didn’t get the raise you were promised, or you just had to go into debt because your child needed a surgery. Each debtor’s story may be different. That’s not what’s important right now. What’s done is done — you’ve gotten into debt and you’re struggling with it. At this point, you are 100 percent responsible for what you do with your current situation.
Debts are a serious problem
I’ve already mentioned that banks and other lending companies will help you finance a whim or need at a price that can be expressed as a percentage. However, the deeper you get into the debt spiral, the more strongly the price will change from interest to anger, crying, feelings of helplessness, depression and many other things that no person wants.
Having debt is devastating, both mentally, physically, and socially
You can’t see it at first. We live normal lives because having debt is now considered normal. In some countries, it is also normal to eat frogs, and such a frog must first be cooked. However, you can’t put it in a hot pot because it will pop out quickly. A frog is an ectothermic amphibian that becomes accustomed to the surrounding temperature. Therefore, the frogs are put into room temperature water and heated gradually. This one, unaware of the danger, ends up, shall we say... miserable.
But what does cooking frogs have to do with debt? A whole lot! Debtors in the same way are slowly losing their health and sometimes their lives. The Internet is full of posts, groups and forums where you’ll read stories that don’t end happily, but drag on for years, like a growing burden. They are full of helplessness, rage, crying and drama.
There are people behind each of these stories. Families who lose assets built up over a lifetime. Marriages that break up because normal conversation is no longer possible due to stress or feelings of betrayal, when debts were concealed until they could no longer be hidden in a closet along with other monsters. Sometimes even suicide.
You may not feel like being told these things, but this is the reality for hundreds of thousands of Poles. The question is, do you feel like joining them and testing how strong your psyche is, or would you rather prevent it while you still can?
