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Debt consolidation and management is more about living and learning. In order to get the most out of life, understanding how to get out of debt is the key. Debtsolutions.com is your guide to knowing why you're in debt, how to get out of debt, and most of all, how to stay out of debt!
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Is Ignoring Your Debt The Right Option?
No one likes paying bills, especially when the money just isn’t there. Surely everyone, at one point or another, has contemplated simply throwing their bills away as a means of dealing with debt. Ignoring your debt sounds great, and is the option that requires the least effort, but is it really a feasible solution?
Simply ignoring your debt could work if the statute of limitations has run out, or will run out soon. The statute of limitations is the maximum amount of time available to a lender, after the date of the last payment to be made on the loan, to pursue legal action against you to reclaim the debt. Statues of limitation vary by state.
If the statute of limitations has expired and your creditor has not sought to reclaim the debt, you are no longer legally required to repay it. However, the likelihood of this happening is slim to none.
Every contract is different, but many debts are referred to as being secure, which means that the amount you owe your creditor is “guaranteed” by collateral such as a house, car, jewelry, or other items. Ignoring your debt would result in the loss of personal property.
Due to the lengthy paperwork and red tape involved, many creditors typically do not want to deal with the hassle of seizing collateral. If forced to, however, they will. If your property is seized and the value of the item is less than the amount of money you owe, then you will still be held responsible for the remainder, compounding your loss.
In addition, creditors may also seek to garnish your wages and report delinquent payments to a credit bureau. This will not only shrink the amount of money you have coming in, but shrink the potential to borrow in the future. Not only is this embarrassing, but it may damage your relationship with your employer.
If you find yourself short on a payment, talk to your creditor about the possibility of making a partial payment or revising you payment plan. Often times, creditors are much more willing to work with you than start the complicated and costly process of legal action. If this is not possible, seek the advice of a credit counselor. Your debt has too many consequences to be ignored.
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