Prevention is Always Better than Cure Even with Finances and Debts
Prevention is Always Better than Cure Even with Finances and Debts
There are two types of debt; the good debt and bad debt. Good debts are debts that help you create an income source, allowing you to produce a positive flow of cash. On the other hand, bad debts are debts that only produce more debts; they don't help you produce money which can be used to clear of your other balances.
Credit card debts can either be a good or bad debt depending on the person who uses the card. If you are using it to buy things that will help you generate a positive flow of cash, then you are managing your finances well. Unfortunately, millions of people do not know how to deal with these debts, and this is the reason why a lot of people are having problems with mountains of credits to pay.
If you are dealing with bad debt, the first thing that you need to do is to immediately approach a debt counselor. They are finance professionals that will help you create a financial plan that is focused on clearing your outstanding balances as soon as possible.
Another option that you can take when dealing with liabilities is the so-called debt consolidation. This is a method of transferring all your liabilities to a lender that offers the lowest interest rates. Paying several bills at the same time with different rates makes it even harder for people to manage their finances; hence, they are sent deeper in debt.
If you have tried both options but is still unable to repair your debt, the last thing that you can do is to declare yourself bankrupt. Filing bankruptcy will get rid of all your outstanding balances, but will ruining your good credit rating for the next ten years. Once you have used this method, you should expect nothing from credit card companies, because they will not allow you to borrow any amount until you regained a good liability standing.
Debt consolidation and bankruptcy are done by people who are suffering from great amounts of liabilities. This can be prevented if you manage your funds well. You can start by creating a monthly budget that should be followed at all cost. Managing your assets well will help you avoid getting loans and unnecessary credits. Always keep in mind that prevention is better than cure, and following a strict monthly budget will prevent you from having problems with your bills in the future.
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