Debt is a vicious, black cloud. It strangles you and makes your life feel pressured and uncomfortable. Unfortunately, we live in a world where debt is the dominant system. Our modern society revolves around money lending. Mortgages, credit cards, and overdrafts are a fundamental part of our existence. At the top end, our banks and governments borrow and lend money at a phenomenal level. Although it is commonplace, it’s important to understand that you don’t have to live like that. The dangers of debt are devilish and numerous. Here are just a few of the awful ways that debt will affect you.
Vicious cycle – Debt is a relentless squeezing pressure on your finances. It drives you down and forces you into compromising positions. The interest payments mount up across your credit cards and overdrafts. The late payments get bigger and bigger. You end up borrowing more money just to cover the minimum payments. It’s a never-ending cycle of torment, unless you take active steps to escape. Debt should be a last resort, not a means to live.
It stays on your record – Everyone has a personal credit report that details their experience with money. It puts a black mark against every missed payment or maxed-out credit card. Future lenders like mortgage companies will look at this report, and it will affect your ability to buy a house. A poor credit report can haunt you for years to come. And it all starts with a few missed payments. Don’t let debt build up and affect your future.
Collection agencies – The scariest thing about debt is that it never goes away. Unless you take active steps, your debt will mount up, and companies will come after you. Some lenders will have your debt charged off. Now, what does charged off as bad debt mean? It means that the lender has given up chasing your debt, and written off your account. But, that doesn’t mean it’s gone forever. Instead, they’ve passed the debt onto a collection agency. They have much tougher means of collecting that debt, including repossession of property or assets.
Bankruptcy – There are two options when it comes to ending the cycle of debt. The first is reclaiming your finances, and making a plan to pay off your debt. The second is declaring bankruptcy. In some ways, bankruptcy can seem appealing. Your debt is wiped out for good, and you can start with a clean slate. But, of course, nothing is that easy. You’ll retain a black mark against your name, forever associated with bankruptcy. You’ll never get a mortgage, business loan, or personal finance ever again.
You’ll never achieve financial freedom – Quite simply, you’ll never be in control unless you subsume all your debt. Unburden yourself from credit card fees and overdraft payments. Only then can you start putting money aside for savings. Only then can you start investing or building capital.
Debt has a way of sucking your life and soul. It drives you down into a deep, endless cycle. There is no bright light at the end of that tunnel. It’s time to snap out, and claw your way out before you get any deeper!