Dealing With Debt – Continued

“Never spend your money before you have it”- Thomas Jefferson

Budget Stock photos by Vecteezy

Continuing on from our previous conversation about debts, there is still a whole load of useful information that we have to share to expand your knowledge! Here we will explore various terms, from debt spirals and bankruptcy to how to manage your relationship with debts, so keep reading for all sorts on information on these topics!

What is a debt spiral?

Debt spirals occur when your debts rise and become more difficult to manage. As a ‘spiral’ traditionally works, the feeling is that your debts are constantly increasing and becoming more unmanageable. Spirals can occur for numerous reasons, including emergency expenses, unexpected falls in income, or overspending – yet more reasons to ensure you are budgeting correctly.

Bankruptcy – How to avoid it!

Bankruptcy occurs when you or your business are unable to repay their debts, and the bank gives you the chance to “start fresh” by giving up all owed debts. However, in doing so, this will impact your credit rating, reducing the chance you can take out loans and secure more debt in the future. Bankruptcy is a key reason as to why it is vital to keep up with your debt payments, and to not let them ‘spiral’ out of control!

Managing your Relationship with Debt:

It is clear to see how debts can have impactful effects on people’s health and day-to-day life. Common problems include anxiety for those who owe significant amounts of money, and this can take a toll on the relationships they have with people who are financially dependent on them, such as their partners or children.

This a serious matter, and one solution is to talk openly about debt with the right people, and how your issues can be resolved.