Wednesday, July 19, 2017
Three Unseen Costs To Ignoring Overwhelming Debt
We all know that if you ignore your debts, they will only catch up with you and cause more trouble. For instance, if you are behind on payments and are letting calls go to voice mail, you are not really solving the problem. All you are doing is causing the lender to continue auto dialing your phone, all the while fees and interest expenses are being added to your balance. It is also pretty common knowledge that if you don’t pay your bills, the items you purchased with the loan may be taken from you (either by repossession or foreclosure). None of these things will help improve your situation, so it is always good to have a plan when you have more debts than you have money.
There are also some unseen costs to ignoring overwhelming debt, or things that most of us do not automatically associate with having too much debt. Three of these types of unseen costs are:
• Added stress to yourself and your family. It has been said that money and financial troubles are the number one cause of most struggles in a marriage or relationship, and that is because when one person bears most of the burden resentment can quickly build. Or, it might be that when money is tight people are more on edge and prone to either pick a fight or participate in a heated conversation. Either way, money problems are a huge source of stress, and most times the effects are not visibly noticeable.
• Damage to your credit score. When you don’t pay your bills on time, your lenders report you as delinquent to the credit reporting bureaus. A few late payments may not seem like a big deal, because at first there are no negative effects. But over time the constant notation that you pay late will hurt your credit. So while you cannot immediately see or feel the pinch to your credit of a late payment, it will eventually cost you.
• Higher rates for rentals. Believe it or not the amount you pay to rent a car, an apartment, or even your insurance premium can depend in part on your finances. When your credit shows too much debt or late payments, some companies raise their rates with you because they feel you are a lending risk.
One way to combat some of these unseen costs is to get a grip on your money. If you are struggling to make ends meet, one way to do this is to file for bankruptcy. While bankruptcy will have an impact on your credit, it will also stop lawsuits and collection calls. This alone can take off some added stress, and the impact on your credit is not as harsh as you might think. In fact, most people are able to start repairing their credit within months of completing a bankruptcy case.
For more information about how to manage debt, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.