New way to pay old debts
Old or new debts have malevolent habit of cropping up when least expected. This is especially true for old debts which somehow refuse to go away giving opportunity to well wishers and paid advisors to inundate person with unsolicited advice. The advice will follow set pattern of limiting expenses ; reducing number of credit cards; getting higher limit credit cards ; revolving debts; paying bills on time and leaving credit accounts open so as not to affect credit history ; managing debt accounts and at all costs avoid declaring bankruptcy as it is more serious than being compacted under debt. Well wishers, including family and friends, will offer unsolicited advice to clear all joint accounts if recently divorced; to transfer debt from one credit card to another ; how to re-negotiate better terms even for short time with creditors and closing of with simple well meaning sentence of simply concentrating on one good bank account and spending within limit.
The advice helps to clear new debts but what happens to old ones that are still lurking in the background. One spends with all good intentions of saving money to clear old debts but single major expenditure to purchase new house or car upsets the money cart creating backlog of accumulating debts. Sometimes intentions are good in that one pays on time or is regular with credit card payment, especially true for credit card or loan payments, but still some debts remain unpaid .
Seeking Help? A person in debt looks for ways and means to clear old debts and start afresh. The reason the word debt activates mental tension and headaches and in order to get away from the all encompassing statistical blunder the hassled person borrows money from private parties, finance companies and banks. It is a chain reaction of taking new debts to clear old debts and in process fueling never ending debt cycle.
Old debts are debts that are forgotten or left to be repaid later. Generally while prioritizing debts to be cleared one ends up placing the minor or non important debts in recess of minds and file cabinets to be discovered when credit card gets cancelled or there are hefty bills to be paid. Failure to clear old debts can lead to imprisonment, loss of property and name and goodwill of friends and companies. The best way to clear old debt is to target accumulating debts on mortgages, rents, taxes, child support, house maintenance, utilities and loans. These should be cleared totally without damaging credit ratings or personal turnover through automatic bill payment schemes of banks or finance companies. When one registers for such programs a monthly payment is made from account or salary to save embarrassment of accruing debts.
The Right Options: The most common debt is credit card debt that gets accumulated at drop of dollars . House loan and auto loans are next in prolonging debts followed closely by study loans taken by students or their parents. While taking loan one feels that they would be able to clear the debt soon but sometimes good intentions go haywire. It is when bills begin arriving by post or credit card gets cancelled or loan agents become persistent with unwanted calls that one sits up and looks for ways to clear old debts. The first option is to take further loans to clear old debts but then one is adding further debts to the kitty. There are institutions, individuals and banks offering help and advice to clear old debts and in haste we agree to whatever is demanded only to realize that one is at mercy of these institutions and banks. Before signing on dotted line it is advisable to check antecedents of company with friends, business associates or on net. Most loan companies are listed making it is easy to verify the demands made for clearing old debts.
The best option to avoid getting into legal or financial trap in clearing old debts is to stop shopping or purchasing unnecessary stuff. For other debts such as home loans, auto loans or study loans try saving every month and paying of loan . Saving becomes mandatory if by chance loan remains unpaid and further loan is taken to clear the previous loan debt. Majority people spend maximum waking hours trying to get out of the web woven around them by loans, debts, credit cards and re-payments. They either succumb to pressure with unnecessary debts to clear previous debts or just wait for further action on part of banks and credit card companies.
An intelligent and mature person is one who spends wisely, is aware of money earned and money spent and maintains a balance between the two. It is easy to blame plastic money for debt woes but it is not the multihued credit cards but person spending who is responsible. It is easy to swipe card to purchase the diamond pendent from the exclusive jewelry showroom or branded outwear from local mall but it is not easy to make payment with limited bank balance.
Sometimes debts accumulate to such high levels that one is forced to resort to unethical means to get out of them. The recent case of John Darwin who impersonated his own death in a canoe accident to get out of family debt reflects the extreme mindset of people in debt.
There is a lesson that to avoid falling into self imposed debt traps it is best to clear old debts in simplest and fastest manner possible.
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