|
November
21, 2002
News Specialist Stacey Butler reporting
KSL has been reporting for several months how Utah has the
bad fortune of leading the nation in the rate of personal
bankruptcy.
The exact reasons why happen to be very complicated, and very
interesting.
In the booming 1990s, we saw the birth of a new class, called
the Nouveau Riche, or New Rich.
But now, here in Utah, there's a new class emerging -- they
want the best in life, but they can't buy it, so they borrow
it and they end up here, in bankruptcy court -- suddenly members
of the Nouveau Poor.
"A lot of people say, 'oh, it's cheaper to live in Utah,'
and it's not," says Jean Lown, a professor of consumer
science at Utah State University.
Time to dispell some myths.
Living in Utah costs the same as the national average. Utahns
earn an average of $50,000 per household -- that's less than
average.
"We're 45th in the nation," Lown says.
But the pressure to keep up is intense. We love brand names.
Homes here cost the same as the national average at $165,000.
But they're bigger with more kids in them, by .5 more per
home. And we have more vehicles.
"When you look at the vehicles that people are driving
in Utah, they're very, very large," Lown says.
We drive those cars more miles each day. Our divorce rate
is higher than average.
"People
are out of divorce court and into bankruptcy court,"
Lown says.
Nationally, one in 69 households file bankruptcy. In Utah,
it's one in 35. This year alone, 22,000 bankruptcies have
already been filed.
"You wonder, who's lending them the money?" Lown
asks.
Lenders, more liberal than ever before, don't consider the
religious contributions of up to 70 percent of the state's
population.
"Tithing takes 10 percent right off the top," Lown
says.
And raising children in Utah costs anywhere
from $6,000 to $14,000 per child each year.
We owe an average of $40,000 on bank, credit card and home
equity loans.
"In the past, what you would see when times got tough,
is that people would really stop spending or slow down. What
we're seeing now is people leveraging their credit, their
available credit, and they run out of options," says
Rob Brough with Zion's Bank.
Whatever the cause, Utahns are digging themselves into debt.
Take a look at the average Utah family. Shane and Denise Odd
make the average income.
They have the average number of children and they shop at
average Utah places.
"RC Willey was one of our major bills," Shane Odd
says.
With $37,000 in credit card debt, the Odds were tempted to
file bankruptcy.
"It
just piled up and we didn't know what to do," Odd says.
Instead, they went to the Consumer Credit Counseling Center
and began slowly paying down their debt.
"You
don't realize how much you spend until you see it on paper,"
he says.
Shane and his family cut back. No more trips on the credit
card. No more sodas at work. A $30-a-month savings.
Brown bag lunch -- $100-a-month savings.
No more movies in theaters. And the credit card? It's history.
It took them four years, but today they own their own home.
Otherwise, they're debt free.
"I don't have that black mark on my credit, because I
didn't file," Odd says.
But a lot of people are filing. In just the last two days,
nearly 200 more Utahns filed for bankruptcy.
Who are they, and just now did they get in this mess? I'll
have some interesting answers in a second report, Friday night
at 10:00 p.m.
|
