|Date Added: December 06, 2010 03:07:36 PM|
|There is one thing about debt that everyone agrees on and that is that no one wants to be in debt. It doesn’t matter how you got there once you are already in debt, what matters is how to get rid of it. According to one of the world’s leading experts in the area of debt and credit restoration, Dave Ramsey, debt is never, ever acceptable and the best thing we can do for ourselves is to systematically eliminate debt from our lives.|
A Closer Look at Debt
There are almost as many definitions of the term ‘debt’ as there are types of debt that can be accrued. However, simply put, debt is something owed which can be tangible or intangible. For instance, debt can be owed in terms of services, goods and/or money and debt can also be a moral obligation. In fact, when you look at debt closely, you will see that all debt is a moral obligation. Sometimes those obligations are far reaching and carry a scope much broader than the eye can see.
Unpaid Debt Has a Snowball Effect
A good example of this is the snowball effect that unpaid debt can cause. In 2008 the market hit bottom mostly because of loans that went unpaid. Not only did those consumers suffer the consequences but many lenders went bankrupt, people lost their jobs, stricter qualifications went into effect making it more difficult to get a loan, as a result more people lost their property and the effects trickled down to the lowest reaches of the population. For those persons who could have paid their debt and chose not to, their actions put them under ‘moral debt’ to the persons down the line who were negatively affected as a direct result of conscious acts.
In any case, debt is something that we should avoid whenever possible. There are a number of ways to get a handle on outstanding debt and if you are overwhelmed it is advisable to seek professional debt counseling. Many agencies have financial advisors and debt counselors whose job it is to analyze your current financial situation in order to help you resolve any issues you might be having. These organizations generally charge a fee for those services, some as a monthly fee and others as a percentage of the debt you owe. The one thing you want to look for in a debt counseling agency is that they do not take any payment from your creditors. Their obligations should be fiduciary to you as their client.
Understanding what debt is and ways to get out of it once you are in over your head should be paramount. Find an online agency or a local financial advisor and you will have made the first step, however small, in getting out of debt now and in the long run. If you are planning to get a mortgage, use the simple mortgage calculator to find out what your monthly payments will be.