Debt seems like it will ruin lives. Indeed, lots of people are now without a home or a car thanks to their arrears. For the average person, this makes it appear as if there is nothing more dangerous in the world. After all, no one wants to become homeless due to bad financial decisions. Plenty of people make mistakes when it comes to their finances. But, the important thing to remember is that the errors don’t have to cost an arm and a leg. To answer the question in the title: yes, there is life after debt. For the non-believers, below are a couple of reasons why.
One Step At A Time
Lao Tzu once said that the journey of a thousand miles starts with a single step. There are no truer words regarding debt. An individual that owes lots of money will jump to the wrong conclusions. They believe that their life is over because they owe more money than they can afford. In reality, there is always a way out thanks to the risk factor. Creditors don’t like to gamble with their money because they would rather get some back than none. In the case of a defaulter, there is a significant chance that the person might go bankrupt and pay back zero pennies. This is the worse case scenario, which is why they are flexible. Debt is quite simple to reimburse one day at a time with a payment plan.
Anyone with more than one loan might find numerous payment plans hard to manage. Don’t fear, though, because there is another option. It’s called debt consolidation, and it breaks debts down into a single monthly arrear. The advantages are obvious, which is why it’s such a tempting tactic. However, there are disadvantages which http://www.moneycrashers.com/ believes might not make it beneficial for some people. The major thing to note is that people can pay more than managing an array of debts. Those that don’t do the maths beforehand might end up paying more. In the grand scheme of things, this is a huge mistake. If the payment is lower, consolidation is a no-brainer. The secret is to make sure it works before pulling the trigger.
Wisdom dictates that a debtor isn’t a viable option for a loan because they are in debt. Yes, banks do refuse the majority of applicants with a bad credit history. But, banks aren’t the only lenders on the market. Anyone with poor finances can still get an injection of cash if they go to the right places. Bad credit loan companies, for example, tend to accept everyone and anyone. That might sound bad, but it’s a godsend when the bills need paying and there is no cash in the account. By juggling the debt, a non payer can wiggle free after a lot of hard work and due diligence. No one is saying it’s a foolproof plan, which is why sites like http://www.moneysupermarket.com are useful. Still, it’s a plan nonetheless.
Before defaulters go running to Wonga or another pay day loan firm, they should do their research. Depending on the amount of debt, a quick search will bear a lot of fruit. A normal credit card lender will sanction a piece of plastic to an applicant even if they have debt. All said applicant has to show is that they are in the process of paying back the outstanding amount. Credit cards are essential for two reasons. The first is that everyone has important payments to make regardless of their finances. Say there is a car crash, for example. Should the victim not be able to get in touch with https://www.rothlawyer.com because they’re poor? Of course they shouldn’t. Secondly, a card allows an individual to manage their finances smartly. If there is a cash flow problem, a credit card can bridge the gap until the liquidity improves.
The universe has a perverse sense of humour. In a person’s time of need, it often stretches out a hand in solidarity. Opportunities are everywhere, but they lie in the least obvious places. Debt is such a place as with a mountain of debt there is the prospect of wiping the slate clean. What does mean? It means that the worse case scenario is bankruptcy, and filing for a Chapter 13 isn’t the end of the world. The great thing about a Chapter 13 is that it clears all unsecured debts. So, any debts like bank loans instantly disappear. The only arrears that stay are the ones which are secured by the government like a student loan. With one strike of a judge’s gavel, the future can look a lot brighter. Sure, there are consequences, and they need addressing before any person takes the plunge. If the pros outweigh the cons, bankruptcy is a viable option.
Good Vs Bad
Not all debt is bad. In fact, http://www.investopedia.com/ says some of it is good as it has the potential to grow. In the haze of panic, a typical person won’t be able to see the growth potential for fear of going bust. When a debtor steps back and takes a breath, they aren’t hard to spot. The trick is to ask a series of questions like will the asset’s value grow in the future? Property is the best example. A house or a piece of land is very expensive in the short-term. The debt, however, won’t last forever if the property value rises in the future. In one foul swoop, an asset like a house can wipe out all debt, good or bad. Bad debt is the kind that makes people pay more for assets which don’t increase in value. In this case, the lender wins as they recoup more than they lend in the first place. As long as the majority of debts are healthy, there isn’t much to worry about as long as it pays out.
Yes, there is life after debt. It’s a hard life that might look bleak, but it improves with time.