Good debt, bad debt: family debt portfolios and financial burdens

What is it about?

Results of this study show that holdings of different types of debts are associated with different financial burdens. Specifically, holdings of three types of debts (mortgage, vehicle, and other debts) tend to increase debt pressure; holdings of two types of debts (education and other debts) tend to increase debt delinquency; and holdings of four types of debts (mortgage, credit card, education, and other debts) tend to increase insolvency. These results are used to construct warning debt portfolios that show greater chances of undesirable financial outcomes. Among them, the top warning portfolio for debt pressure is the combined holding of mortgage-vehicle-other debts, for debt delinquency is the holding of education-other debts, and for insolvency is the holding of mortgage-credit card-education-other debts.

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