Use Worksheet 7.1

Every six months, Liam MacCabe takes an inventory of the consumer debts that he has outstanding. His latest tally shows that he still owes $4,000 on a home improvement loan (monthly payments of $125); he is making $85 monthly payments on a personal loan with a remaining balance of $750; he has a $2,000, secured single-payment loan that is due lat next year; he has a $70,000 home mortgage on which he's making $750 monthly payments; he still owes $8,600 on a new car loan (monthly payments of $375); and he has a $960 balance on his Visa (minimum payment of $40), a $70 balance on his Exxon credit card (balance due in 30 days), and a $1,200 balance on a personal line of credit ($60 monthly payments). Use worksheet 7.1 to prepare an inventory of Liam's consumer debt. Find his debt safety ratio, given that his take home pay is $2,500 per month. Would you consider this ratio to be good or bad? Explain

AN INVENTORY OF CONSUMER DEBT
Name		Date	November 1, 2023
Type of Consumer Debt	Creditor	Current Monthly Payment*	Latest Balance Due
Auto loans	1.		$		$
		2.
		3.
Education loans	1.
		2.
Personal installment loans	1.
		2.
Home improvement loan
Other installment loans	1.
		2.
Single-payment loans	1.
		2.
Credit cards (retail charge	1.
cards, bank cards, T&E	2.
cards, etc.)	3.
		4.
		5.
		6.
		7.
Overdraft protection line
Personal line of credit
Home equity credit line
Loan on life insurance
Margin loan from broker
Other loans	1.
		2.
		3.
			Totals	$ -	$ -
Debt safety ratio	=	Total monthly payments	100 =	$ -	100 =	0.0%
Monthly take-home pay
*Leave the space blank if there is no monthly payment required on a loan (e.g., as with a single-payment or education loan).