5 Common Misconceptions And Myths About Debt

by - 8/10/2018 07:59:00 PM

Most people have debt in one sense of the word or another, but when this debt starts to get overwhelming, it’s important that you take action. Instead of burying your head in the sand, you need to tackle the issue head-on and do what’s necessary to put yourself in a better place financially. Unfortunately, debt is a complicated and confusing topic, with a lot of myths and misconceptions surrounding it. To help you separate the facts and the fiction, here are five common debt myths you should ignore.

All Debt Should Be Avoided
Despite what some people say, there is a difference between “bad debt” and “good debt”. Of course, if you fail to make payments when they’re due, all debt can cause some harm, but that doesn’t necessarily mean that it should all be avoided. Student loans, business loans, and mortgages are all generally deemed as “good debt”, as they can help you make more money and get further in life. Just make sure that you’re able to make the repayments before applying.

The Deceased’s Debts Live On
Many people believe that, when a person dies, their next of kin inherits all of their debt. Thankfully, this couldn’t be further from the truth. If the person in question had any money or assets, then this might be put towards paying off what they owe, but, if not, then their debt would be wiped out. This means that you may not get the inheritance you were hoping for, but you certainly wouldn’t be expected to pay any credit card bills.

Bankruptcy Is Your Only Option
Bankruptcy can be used when you have debts you’re physically unable to pay, but only when you’ve considered every other alternative there is. You should always try debt management and repayment first, as you may be able to solve your problems in time. If you’re struggling to handle your debts alone, or need some advice on your options, then there are always debt advice services out there for you to use, many of which are free or non-profit.

Getting Married Means Shared Debt
Getting married is a huge commitment, but, contrary to popular belief, one of the obligations you don’t have to deal with is paying off your new spouse’s debt. Many couples think that, when you get married, you instantly become responsible for the debt of your new partner, but, generally, this isn’t the case. Of course, if you take out loans or credit cards together, then this is a different story, but in any other case, you’d only be legally obligated to pay your own bills.

Checking Your Report Is Damaging
Checking your own credit report regularly is a sensible thing to do. In fact, the government encourages you to do so at least once a year. This way, if your credit score is less than great, you can make adjustments and changes to ensure it stays in tip-top condition. This is crucial if you’re planning on applying for a new line of credit. Checking your credit score can show up on your credit report, but, despite the common misconception, this won’t harm it in any way.

Debt can be a complicated subject, but, hopefully, this has helped to clear up some of the confusion and make it easier to take charge of your finances.

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