Friday, November 17, 2017

What People Never Tell You About Debt

‘It’s terrible’, ‘you can get out of it if you’re determined enough’ and of course, the classic, ‘you obviously overspent.’ Essentially, if you’re in debt, you’ll hear people telling you, not completely surreptitiously that it’s your fault. This is nonsense, and I can prove it with one statistic. In 2015 8/10 Americans were in debt as seen on, and if you think that stat has changed, you should probably think again. The world hasn’t improved all that much in two years. In fact, I would argue that while debt is terrible, being determined isn’t even the only thing you’ll need to get out of it. So, let’s look at some of the things that people will never tell you about debt but that are certainly true. We’ve already covered one. 

Overspending Isn’t The Only Reason For It

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It’s important to remember this because it can seem like overspending is the reason why people end up in debt, and yes, this can be a cause. In fact, you could even go as far to say that too many people are relying on the plastic in their wallets and purses rather than the money in their bank account. That, it could be agreed, would be a fair point. But it’s certainly not the only cause. Do you know what else can cause debt? 

Buying a house. It’s true, buying a house is a massive cause of debt for people, and we’re not just talking about expensive mortgages here. We’re referring to the bills that people just don’t see coming from expensive repayments. You can very easily get in over your head, particularly if we’re talking about your first property here

Or, how about medical bills. In countries like America, where healthcare isn’t a given, medical bills can certainly cause issues with relation to people’s finances. For instance, cancer treatment regularly exceeds one hundred thousand alone. Just think, finding out that you have cancer and then discovering that treatment of the disease will cost you your livelihood, but your quality of life's in jeopardy. 

Alternatively, you could just be made redundant. It’s easy to think that if you work hard, always do your best and deliver a great level of quality when working you won’t lose your job. But that’s not true. Workers are laid off all the time and what then? On average, it can take around six months for people to find work after being made redundant. That’s more than enough time to end up in some form of debt, particularly if you have to borrow to pay the bills. 

There’s More Against You Than You Think

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Okay, so your finances have been through the wringer, and you’re trying to recover. How do you do it? Well, one possibility might be to borrow your way out, and it’s not as crazy as it sounds. If you can borrow from a source offering a lower interest rate, then it makes sense, and that’s exactly what is on the table with debt consolidation. With debt consolidation, you can pool all your debt from various sources into one easy to pay the sum. Awesome right? So, then you can pay it off naturally each month like a basic tax. It’s probably sounding even better, but here’s the kicker. To do that you need to be able to borrow. 

You might run into a slight problem there with your bad credit score. Bad credit scores tend to scare off lenders, and you will almost certainly have one if you’re in debt. It sounds crazy when you’re talking about a loan designed to get people out of debt, but we guarantee there is debt consolidation loan lenders that won’t give out money to people who have bad credit. Luckily, not everyone is like, and you can read for more information on companies that can and will give these types of loans out to people with bad credit score. But borrowing to pay off the debt isn’t your only issue. So, perhaps we should look at something no one will tell you about debt recovery. 

They Won’t Let You Forget

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This is absolutely true. You might think that once you pay off your debt, you can get back on your feet, but that’s not always the case. Indeed, it’s fair to say that even after you start paying off the debt people are still going to hold your problems against you and it’s all due to that annoying credit score. This can impact your livelihood, whether you can rent or buy a property and many other financial and personal issues. The fact is that you won’t just be working to escape debt. You’ll need to salvage your credit score too. There are ways to do this, such as peer to peer lending schemes. These are safe projects that allow those who need it to lend and borrow money in an environment where there is no risk. You can learn more about correcting your credit score on

This, among many reasons, is why the road to debt recovery can feel a little like a juggling act. It’s not just about paying the money you owe back. 

It Gives You A New Perspective

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On the plus side, getting lost in debt certainly gives you a brand new perspective on finances. You have a completely fresh outlook where you will be more concerned about how much you’re spending and where. As well as this, you won’t be so quick to spend on frivolous purchases and perhaps even avoid things that depreciate in value rapidly like for instance cars. A little run-in with debt is enough to convince anyone that it’s never a good idea to buy a car brand new

As such, you may just find that this negative experience helps you handle money far more effective and with a little luck, improve your quality of life. Particularly if you start saving more for rainy days and spending less on things that you don’t need or won’t want in a few days. We’re not saying this is what lead you to debt. It’s highly likely that it was something far beyond your control, but it never hurts to focus on the silver lining of the fact you’ll do everything in your power to make sure it doesn’t happen again. 


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