A Beginner’s Guide to Dealing with the Burden of Debt

Get out of debt

Finding yourself struggling with personal debt is an unpleasant and challenging situation. Not only can it cause depression and stress, but it can also affect your day-to-day living and your finances in the future. If you find yourself feeling overwhelmed, unsure where to turn to, our beginner’s guide to debt can help you understand the implications and how to deal with it.

What is Debt?

Personal debt is a significant issue throughout the United States, and it’s not something which looks to be lessening anytime soon. With the global economic recession hitting hard, money simply doesn’t go as far as it once did, which means many people are living outside their means, not always through fault of their own. If you have personal debt, you are legally responsible for repaying it. There are many reasons why someone may find themselves in debt; unexpected medical bills, student loans, loss of jobs are just a few of the circumstances.

The Financial Repercussions

The financial implications of being in debt are tenfold. It can drastically affect your credit rating, which can cause lenders in the future to refuse you credit. You may be refused a mortgage, or you may be refused tenancy on a rental property if you fail to show you can pay your bills and rent on time. In certain states, having debt can decrease the amount you can give your children or partner once you have passed on. If you don’t pay your debt, it can lead to a collection agency being notified, and this will stay on your record for at least seven years.

The Health Repercussions

Debt not only affects your financial present and future. It also is the cause of mental health issues, relationship breakdowns, and challenging lifestyle obstacles. While the anxiety and stress are well documented, there are many repercussions which are lesser known. If you and your partner find yourselves spiraling with debt together, it can cause resentment, and be the spark which lights the arguments. Debt can be the reason why you can’t enjoy your life as you once did. If you used to take regular vacations, this might be a thing of the past while you try to settle your debt. You may have to move out of your dream home into a smaller, more manageable property, where you can afford the rent or mortgage more easily.

How to Eliminate Debt

If you are struggling with debt, eliminating it should be your priority.There are a variety of ways to do this. For example, you can apply for a Peerform peer to peer loan, which will allow you to consolidate your debts into one payment, and you will then have one monthly repayment, rather than many. If you are turned down for a personal loan, you may wish to turn to specialist charities and information centers who can help you create a debt management plan (DMP) which will sort your debt payments into order.

The burden of personal debt can be an isolating, worrying, scary time. It can affect every aspect of your life, from your health to your financial future. It’s a situation you need to work to change and change it quickly for your well being.

Anum

Anum Yoon is the founder and editor of Current on Currency. She loves all things personal finance, which is why you'll find her work all over the PF blogosphere.

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