In recent news, there is a saying like low interest rate prevented bankruptcy and foreclosure. I can't get it. This seems only to apply for variable interest rate loans... How is low interest rate preventing bankruptcy and foreclosure?

News: http://www.telegraph.co.uk/finance/personalfinance/borrowing/8683007/Rock-bottom-Bank-Rate-preventing-wave-of-bankruptcies.html



Most of the bankruptcy is due to taking [or building over a period of time] a loan that one cannot service, if the interest rates rise, then the amount of money to repay the loan increases, when one doesnt pay the revised amount and keeps paying less, the over all debt keeps shooting through the roof ... a lower interest rate means that one can continue to pay the same amount ... and few missed payments do not cause as much as damage as it does when the rates are high.

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