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April 2, 2007 | by  | in News |
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The Young and the Bankrupt

A report recently released by New Zealand’s Insolvency and Trustee Service shows a massive boom in the number of bankruptcies among twenty-something Kiwis.

Saddled with student loans, bank debt and the rising cost of rent, more and more young people are being forced to declare their inability to manage funds.

Overall, the number of bankruptcies in New Zealand in the eight months to February was up 22% from the same period last year. Meanwhile, the amount of credit card debt in the hands of New Zealanders rose 15%.

VUWSA Welfare Vice-President Heyleni Pratley says one of the contributing factors in this rising debt is banks targeting students with tertiary credit cards and interest-free overdrafts.

Pratley says that the dishonour fees which arise when students cannot repay these loans are a way of targeting the poor and “sum up capitalism in a nutshell.”

Pratley recalls meeting students who are in debt because they live off a $150 student allowance or loan, yet have to pay $150 in rent each week.

She usually advises these students to move.

Pratley adds that the bulk of the students who come to her in dire financial straits have had issues with Studylink, who can be quite erratic in the time they take to process loans and allowances.

Barbara Scelly from Vic’s Student Financial Support and Advice believes that many of the students who come to see her for help have been spending too much money on the ‘extras’, such as drugs and gigs, which causes them to run out of the funds needed to pay their rent, power and food.

Financial Support publish a student guide to managing money, available from their office or on the website, www.vuw.ac.nz/st_services/finAdvice.

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Tristan Egarr edited in 2008. He threw a chair once.

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