Financial illiteracy is one of the triggers of over-indebtedness. Financial illiteracy is defined as lack of financial knowledge or skills. Personal finance management entails the understanding of money management basics and when this is lacking, over indebtedness is one of the consequences. For example, good knowledge of credit card management can help to reduce card balances in addition to understanding how to avoid high interest payments. Most importantly, an individual’s financial attitude plays a crucial role in over-indebtedness.

This is a very important subject that you have brought up Joseph Mandla Maseko Needs much deeper study.

Agreed indeed Emmanuel V Murray . I am hoping that this could be a start of that discussion. I am separately also surveying views of a specific audience in South Africa, called Debt Counsellors. They are registered in terms of the National Credit Act No 34 of 2005 as amended (NCA). They counsel and guide the restructuring of repayments of debts between consumers in distress and credit providers such as banks.

I also fully appreciate the answers hazarded by Mojibola_Bamidele-Sadiq as they hazard content to such a question. As an excellent start, we can build other possibilities that we have empirically observed or gathered from researched sources. I fully appreciate these responses colleagues and hope for more responses that c an grow this line of enquiry.

Generally, (i) easy access to credit, and (ii) financial illetracy are the main causes of financial overindebtedness. There is support for these in the literature as well

Lenders and borrowers have a role to play. Over aggressive lending by lenders in relaxing lending guidelines has a role to play. If the lenders don't lend or dont make it easy, the borrowers will not get to borrow. Easy lending guidelines (not fraud) help to boost the economy and poor loan payout don't show up as bad loans (not fraud) until the economy turns bad.

Thanks Peterson K Ozili. You are spot on as the build up to the enactment of the National Credit Amendment Act No. 7 of 2019 (NCAA), in South Africa, bore this out. Discussions in then Portfolio Committee that instigated the Parliamentary Bill that later evolved into this amendment, captured these two points among others - from credit providers, researchers and even the politicians themselves. And these straddles both the intrapersonal (illiteracy) and intrapersonal or institutional (easy access). The latter has also been defined to include reckless lending in the South African statutory nomenclature.

One has also experienced in real life the consumers in need of credit, presenting fraudulent evidence that they can afford credit to convince credit providers such as banks. And after these amounts sought have been advanced, they turn around and claim reckless lending on the part of the lenders, in line with the statutory provisions in the National Credit Act. Facts in the hearings of the national Consumer Tribunal then eventually show where the consumers themselves misled the credit providers by advancing fraudulent evidence of their affordability. So, the justice element needs to cut both ways as philosophically designed, to look out for both parties. Reckless lending in South Africa, once proven in evidence, is punishable by the writing off of that debt either by the court (judicial tribunal) or the National Consumer Tribunal (administrative court).

The foregoing comment from our end of the globe also covers the aspects correctly raised by Chung Tin Fah. Fah adequately and accurately centres the reckless lending which in the South African statues is even considered unconscionable. And over and above being punishable by expunging of the debt by the court or Tribunal, the credit provider might also be deregistered and thence barred from lending out credit. Much appreciated inputs there.

I don't believe there is one morsel of debt or consumer royalty that is not akin to colonialism, but on a market-specific level. I do believe that a Class-action-suit could be filed for reversing funds back to 1913 to each year's cash:debt level. Most GDP is debt, and only 50% has been going back to personal income (everything saved is lent for more than exists).

In fact, there is not one debt or payday loan that could not be argued for the above remedy a as a solution with Amendment 13, the Sherman Act prohibiting trade (and renting-out more places to use/sell for yourself by the way). It is wagering others' money unless it is a business partnership on the merits of an invention or team, since that individual has patrons or that individual cannot BE, while a business contract can exist while not eating, with health and in shelter.

Wagering someone else's money is so in debt and consumer royalty but not business location/customer/intellectual-property royalty with max profit. I'd pref copyright as the extent of IP as a consumer and web product owner... I may have to be a medical inventor to care, but only to consider time spent in invention and thereby scope of copyright.

Hi Nicholas Carducci. Thanks for the contribution. It seems to cover several points. I will search for some literature, off-line, to see how one can pyramid the content and converge it within the issues of triggers and propellers of over indebtedness. Much appreciated. In the meantime, could you kindly favour the forum with a copy of the Amendment 13, the Sherman Act at all? It would be much appreciated.

Thank you Joseph Mandla Maseko for the opportunity to provide my guidance on your work.

I believe these U.S. laws describe the following as illegal: debt, >1month rent and invoices if involuntary trade is servitude and monopolization is colonization of a market without producing, buying or closing a trade by promising money that they do not own.

• This is the U.S. Constitution Amendment 13: "Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."
• The Sherman Act according to the U.S. Federal Trade Commission: "The Sherman Act outlaws 'every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize.'"

Finally, I hope you can apply the following rubicons and triggers as a point of over-indebtedness. Debt is a currency stockholder decision, but distribution of profit and outlays is not.

The trigger is the first usurped contract promising other peoples' money and under duress by others price-fixing to also borrow under a prisoner's dilemma situation. You may also try to estimate how much of the debt would be invested in commodities, property, equity/royalty or royalty with max-profit if debt & renting-out more than 5 properties out were banned to highlight a numerical or relational investment to capita or cash outstanding trigger to be promised based on investor-diligence of actually getting money back without private lender intervention, not cashing-out at price-fixed valuations or inevitably extending terms or foreclosing for the asset they should have bought from the start themselves if they want it... That is where I would define the point of becoming over-indebted if I were to assume, for this instance, "indebt" also could mean the royalty with max-profit alternative. Otherwise, promising other people's money and your customers to prohibit them from buying the product directly is too much, but promising a portion of a business line that is not a living-being but a switch to distribute money is a fine-amount of promising. In my technology solution for this (vaults.biz in development 2020-22) I will give the entrepreneur the option to sell royalty with max-profit contracts with either an upon-withdrawal or an upon-sale tract for automated-distribution and withdrawal-caps.

I believe the impossible contract depending on the consent of another will prove to always garner more investment than royalty with max-profit might, and more will turn to equity/royalty, commodity or vault-share certificates, but that would be your over-indebtedness number in my book, in addition to the over-promising made by any consumer or time-based debt at all. For geospatial instance, the total debt in the U.S. price-fixes and pays out at $82 trillion : $6 trillion cash in mid-2020.

Wow, much appreciated again colleagues. A very Prosperous new 2021!!!

Dear Joseph Mandla Maseko,

I am doing research on this topic. Since the end of the 1990s, I have been conducting research in the field of improving the credit risk management process in commercial banks, methodology of analyzing the creditworthiness of a potential borrower, credit scoring and analysis of the level of credit risk accepted by a commercial bank granting a loan, analysis of the sources of the global financial crisis of 2008, the role of policy monetary, pro-development socio-economic policy, including source factors causing excessive indebtedness and consumer bankruptcy due to credit defaults. I have published the results of the research on this topic in the articles and monographs that I posted on the Research Gate portal. I invite you to research cooperation in this area.

Best regards,

Happy New Year 2021

Dariusz Prokopowicz

Wow, much appreciated Dariusz. I will certainly do so as I already note many overlaps in the interest and yours seems to already straddle the angles of both eh borrowers and then lenders simultaneously. Compliments of the season to you too. Cheers.

Pathological gambling as an addiction like alcoholism

Hi Beatrice, Thanks once again for the answer above, which opened up another door that one would not have thought off at all.