Debt is a small word, but it has been the cause of untold heartache in the lives of many people. Debt can have severe consequences in our lives. Families have been broken because of debt, businesses have failed, countries have become unstable, wars have been started; and debt was the reason behind all of it.
One of the main ways that people to get into too much debt is by unwise use of their credit cards. For the past several years, credit cards have been growing as the preferred method of payment. Today, most, if not all online payments are made using credit cards (see Online Banking May Not Be That Safe for cautions about using credit and debit cards online) and people frequently prefer carrying credit cards instead of cash because they think credit cards offer more security. The exact opposite may be true, however.
For one thing, it has been shown that people usually tend to spend more when using a credit card than when shopping with hard cash. This tendency to spend more when using credit cards is what leads to a large portion of the population to spend more than they can actually afford. Eventually, as their credit card debt increases, people find it tempting to start delaying the settlement of their monthly bills, which, much of the time an unpleasant surprise. The urge to spend however does not go away, however, as the balance on the credit cards increase, and the credit card still allows them to spend, even when they cannot afford it.
Over time people find themselves in more debt than they can settle. As a result, they may end up liquidating their assets to settle these debts. In cases where people do not posses sufficient assets to cover their debts; they may end up having to file for bankruptcy.
Of course, the use of credit cards may not be the only reason for this kind of excess debt. Taking out mortgages and personal loans too large for one’s income may also lead to excessive debt. The recent recession is plenty of proof for that.
Traditionally, the main action that was taken when a person had excessive debt was to settle it either by liquidating assets or by filing for bankruptcy. There are new factors in the picture now, however – debt elimination laws.
There are different types of debt elimination laws and there are companies that can help to guide you through the legal maze. However, although some debt elimination services are legitimate, such as credit counseling and voluntary repayment plans, there also are debt elimination scams, so be careful.
The debt elimination scams usually try to convince people to pay large amounts up-front and commissions that depend on the amount of the debt involved. These “so called” debt elimination companies may claim to exploit loopholes in the laws to eliminate a person’s debt, whether it is a mortgage or personal loan. Some people who have fallen for debt elimination scams have ended up paying large sums which only added to their debt.
For more information about debt elimination companies, read the Debt Elimination Companies article. Also, check out the other articles on this site that are listed on the right side of this page.