Why America's Really in Debt

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Forget everything you thought you knew about America's debt problems. It's not reckless spenders racking up a record $800 billion in balances on credit cards that's the problem. The problem is with average Americans just trying to make ends meet, according to a new study.

Why can't you pay it off?
Layoffs, major medical expenses, education costs, and bad transmissions are evidently the things that separate the economically vulnerable from the fiscally stalwart. When asked to cite what contributed to their current level of debt, respondents cited the following:

* Car repairs (48%)
* Home repairs (38%)
* Major appliance purchase (34%)
* Basic living expenses (33%)
* Illness or necessary medical expense (29%)
* Layoff or loss of a job (25%)
* Tuition or expenses for a child, spouse, partner, or self (21%)
* Money given to family members or used to pay debts of other family members (19%)
* Tuition or other expenses for a child who's high school age or younger (12%)
* None of the above (12%)
* One or more of the above (88%)

When the bankruptcy bill goes into effect on Oct. 17, lenders get yet another hand to play in their favor. The Plastic Safety Net study shows that even the best-intentioned debt-strapped households -- and most of them are diligent about their finances -- are living in a house of cards.


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