Avoiding debt is top of mind for many Florida residents. Many budget and make purchases based on their needs and any discretionary income. However, there are those who ended up accidentally falling into debt during and after the Great Recession and many who are now living in constant fear of losing their homes and wage garnishments.
In order to get out of debt, the first thing is to realize exactly what debt is and how it works. In the simplest terms, people take on debt when they borrow money to buy something they would not be able to afford all at once. A perfect example of this is a college education or a house. These two purchases are normally considered OK.
However, there are those too who use credit cards to make purchases they otherwise could not afford. This becomes tricky when high interest rates leads to larger payoffs. Others too also get into the dangerous behavior of borrowing more debt in order to pay for other debts.
When it comes to credit card debt, many like to think that it is younger Americans who are not responsible with their money or simply do not understand how debt works. However, according to the U.S. Census Bureau, it is actually older Americans who have seen the largest uptick in debt. This alone is proof that no one is immune to debt.
Of course the advice is to only purchase what can be afforded, and for those larger purchases like a college education or a home, make sure that the monthly payments will be manageable. But, for those already living with massive amounts of debt, know there are options available.
For example, if medical bills have gotten out of control and credit card debt is continuing to pile up, and if these bills are putting a homeowner in jeopardy of losing their home, now is the time to talk with an attorney with experience handling bankruptcy and other debt relief options. Regardless of the situation, an attorney can evaluate the situation and provide insight into options.
Source: Consumer Affairs, “How to determine how much debt is too much”, Mark Huffman, March 26, 2013