5 Popular Myths About Debt To Ditch ASAP
Popular Myths About Debt:
Most of us have some sort of debt, whether we’re spending on a credit card, using an overdraft, or taking out huge loans to buy a house. When it comes to debt, you’ll find that there are plenty of old wives’ tales floating around. Although some of them will offer useful advice, most will only harm your finances further. In fact, some of the most common beliefs about debt are actually nothing but fiction. With that in mind, here are five popular myths about
1. Debt Can Live On
We all have certain things we want to leave to our loved ones when we pass on. You may wish to give your spouse your wedding ring, your son your favorite watch, and your grandchildren money for college. What you don’t want, however, is for these people to have to pay off your debts. Thankfully, they won’t have to. More often than not, debts are written off when a person passes away. If creditors still want their money, then they would have to claim on the estate.
2. Debt Should Be Avoided
While it’s true that expensive and out of control debt can harm your financial health, it’s equally true that debt can be a useful tool. Carefully building a credit history with well-managed debt will help you to meet your financial goals in the long run. If you wanted to buy a home one day, for example, taking out and paying off a Swedish 5000
3. Debt Will Be Split
Taking out a loan with another person is a decision you should never take lightly. Although most people assume that each person would only be responsible for paying back half of the debt, this simply isn’t true. Regardless of the circumstances, you would both be liable for the full amount. This means that, if you split with your partner, and they failed to keep up with their repayments, the lender would expect you to cover the full cost of the loan, even though you aren’t together.
4. Debt Advice Is Expensive
Trying to tackle debt alone is never a good idea. The trouble is, many people are too ashamed or embarrassed to speak to their loved ones and ask for help. It is in these situations that you should seek professional advice. While this might seem like the sort of thing you would have to pay for, debt advice is actually free. There are many debt advice charities out there who will help you for nothing. Because of this, you should never turn to a company that charges a fee.
5. Debt Results In Prison
Being unable to pay off your debts won’t land you in prison. Some creditors might try to argue with you that it could, but this is pure fiction. The worst that can happen to you is that you’ll be issued with an order that states you must pay a certain amount towards your debt. This could be as a lump sum or from your wages each month. You could potentially go to prison for not paying taxes, but this usually only happens due to refusal or neglect, not a poor financial situation.
Debt is a complicated subject, but you can make it much easier by ignoring the myths above.
Any debt tips you can leave for us? Comment below!