There are plenty of horror stories about debt and what it does to people’s lives. While everyone’s situation is a bit different, a few scenarios continually plague consumers. Here are five scary debt disasters you need to know about to hopefully avoid falling victim to them.
When you hear about zombies, you probably think about “The Walking Dead”—or maybe “Night of the Living Dead” if you’re into classics. While zombie debt isn’t going to eat your brains, it’s still pretty terrifying.
The concept is essentially playing on the idea of something coming back to haunt you when it should be good and dead. These debts are bought from your creditors by a more aggressive collections team, who will bother you to no end in order to receive payment. Just like in the movies, this debt just keeps following you.
Ravaged Credit Score
Your credit score is what tells a lender how likely you are to pay them back if they loan you money. A high credit score means you’re seen as more reliable. This means people will gladly offer you funds, likely at a low interest rate.
Having a low credit score, however, does just the opposite of this. A lot of lenders are going to second-guess whether they should give you funds for something. And if they do, they’re probably going to do so with a higher rate of interest. There are times when you need to take on debt—like if you need to buy a car. In times like these, having a decimated credit score due to your past can make things much more challenging.
When people think about debt and credit issues, bankruptcy is often one of the first things that comes to mind. Bankruptcy is a drastic response to debt. In a Chapter Seven liquidation filing, which is the most common type, your debts are eliminated but you give up all qualifying assets. This can include things like your house and car. Problems don’t end there though. A bankruptcy stays on your credit report for years—making it much more difficult for you to get loans at a good interest rate. This can be especially painful when you need to buy a vehicle after yours has been liquidated to pay bankruptcy costs.
It’s important to seek out other options before resorting to this. If it seems like nothing you do has any effect on paying down your debt, it might be time to work with a debt relief agency. You can end your debt horrors by working with Freedom Financial Network. They’re a top player in this field and they keep consumers’ best interests in mind.
Few things are scarier than having something precious to you—like your vehicle—taken away. Repossession keeps many people up at night. In fact, seven million people in the United States are currently 90 days behind on their car payments. There’s no telling when the repo might happen. Some people even sleep in their cars to avoid having them taken away.
Ultimately, this can be a hard process to stop. And, if you try to avoid repossession by attempting to delay the process, it can cost you a lot more. The repo person bills the lender for their time.
Yet another chilling result of disastrous debt, collections keep a lot of people on edge. You’re always expecting that call and don’t want to pick up the phone out of fear of it being the debt collector. People who’re in the process of going through collections need to know their rights as consumers. There are lots of things collectors aren’t allowed to do but will still try in order to intimidate people.
Debt is frightening. It’s made even worse when allowed to morph into one of these situations. Try to get your finances under control so you don’t have to deal with these debt nightmares.