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The debt of the Poles is decreasing. Older wise, younger wise

The debt of the Poles is decreasing.  Older wise, younger wise

Everything indicates that the pandemic has forced the Poles to be more careful about their finances. However, this observation mainly applies to the elderly – those over 35 years of age. In this age group, both financial arrears and the number of debtors decreased for 12 months (compared to August 2020). A year ago, unpaid bills for older Poles were PLN 42.86 billion, which means it was PLN 2.33 billion higher than it is now. At the same time, the number of debtors in this age group in the KRD statistics decreased from 1.86 million to 1.76 million.

The financial history of Poles under the age of 35 is quite different. In August 2020, they had 5.55 billion PLN to be repaid. In just one year, their unpaid liabilities – included in the KRD – increased to 6 billion PLN. The number of debtors also increased from 631,000 to 650,000.

Young people don’t care about the epidemic as much as adults do. Also because they often receive support from their parents who help them in an emergency. Older people, dependent on life experience, fear for the future and tighten their belts. You can see it in our database. Arrears and the number of debtors in this group is decreasing. The coronavirus pandemic has checked their attitude to purchases, whether large, such as cars, radio and television equipment or ADG, as well as daily expenses – explains Adam Aoki, Chairman of the Board of Directors of the National Debt Registry of the Bureau of Economic Information.

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The experience of debt collection company Kachmarski Inkaso shows that Poles under the age of 35 have a completely different approach to repaying arrears. The younger ones live according to the principle of “no boundaries” and are immune to negotiations. On the other hand, seniors understand the consequences of debt and try to work with negotiators to prevent their situation from deteriorating.

The survey conducted by IMAS International for KRD showed that 30 percent. Poles with unpaid bills admit that they cannot afford to pay them. As much as 62 percent. They are immersed in it, but about a third of them do not feel any discomfort. In order to pay them, they usually ask their families for financial assistance. Most often, they do not settle cash loan installments, payables for telephone, Internet and television, as well as rent and utilities. They also have problems repaying … amounts borrowed from relatives.

In our daily work with debtors we see clear differences in the attitudes of younger and older Poles. The former are not ready to compromise and abandon the adopted lifestyle, despite the accumulation of financial problems. On the other hand, seniors are open to conversations and even calling themselves to make a payment plan and accept our support in managing the home budget. They can also negotiate — says Jakob Kosticki, chairman of the debt-collection firm Kachmarski Inkaso. Debt collectors are of the view that people under the age of 35 are not alarmed by the consequences of non-payment, such as very limited creditworthiness or the social debt of the debtor.

KRD data shows that women are less likely to fall into debt than men – they represent about 36% of both younger and older debtors. Men, especially younger ones, tend to take on much greater financial risks.

Experts call a group of men “hardware lovers.” They are young men who work sporadically and spend their money on fancy first. Such people begin to maintain professional continuity quite late, only at the age of 26-28. Before that, they worked a little, changed their place of work, lived at the expense of their parents and beyond their means. They take out installment phones, cars on credit, and loans for weekend attractions. They show no interest in paying their debts.

The second group includes young investors who “boost businesses”. They open a business for the first time in their lives. Their companies either do not generate the income initially planned or they are a misguided project. They live above their means, buy rental cars, rent and equip offices that they do not need yet. They are reluctant to cooperate with negotiators, claiming that they know better how to take care of their financial situation.

The third group are men who have founded families who want everything to be at the highest level, often beyond their capabilities. They feel the need to buy an apartment or house, get a good car and provide for their families so that they do not lack for anything. They cannot estimate their financial capabilities, so the next loan installments begin to confuse them. But in the opinion of negotiators, they have a sense of duty and want to communicate.

With age, the gender difference in the backlog settlement approach becomes blurred. Women and men over the age of 35 are more willing to cooperate with a debt collection company. They know what debt penalties are and understand the consequences. During the conversation, they are open to suggestions from the negotiators, who are able to influence their beliefs and encourage them to pay the arrears so that they can move forward straight.

Collecting debts of mature people is more realistic. These people are flexible and can negotiate. If they contact the debt collection agency themselves, they know why they are doing it. Debt repayment problems are often explained by job loss. And adults are more willing to cooperate and make a decision, for example, to partially repay the arrears. There is, of course, a group that is not ready to settle the arrears, and these people usually cite the need for child and family support as the reason – explains Jacob Kosticki.

Jacek Brzeski

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