Debt Disasters

The Right Attitude and Approaches to Credit Card Debt Disasters

debtThose who find themselves buried in debt may be thinking of ways to get out of the situation. A lot of solutions are offered to those who are buried in debt. There are loans for people with bad credit which can help. In all honesty, many of these solutions are pretty bad ideas. Maybe “bad” is a harsh way to describe certain options. Perhaps “last resort” would be a better description. Until actually reaching the point where no other option is available, it is best to avoid certain strategies. Likely, there is a better plan available. Simply exploring alternative options could lead to a better, more preferable outcome.

Ill-Advised Default

Deliberately defaulting on debt is a terrible idea. In addition to the obvious problem that a credit score is going to be ruined as a result, there on going to be consequences. A contract has been violated. With secured debt such as a car loan, repossession is unavoidable. Most people accept this and acknowledge they are giving up the car upon default. With unsecured debt, however, the situation could end up becoming more disastrous. Credit card companies are not going to allow someone to borrow money and not pay. Upon defaulting, the borrower is likely to face civil action.


Filing for personal bankruptcy is not a bad idea if there are no other alternatives. Bankruptcy is a legal process, which means the courts become involved. All documents and records related to personal and/or business finances must be submitted to the court for review. Errors and mistakes could lead to legal troubles. This is why hiring an attorney is so strongly recommended. Of course, that runs up even more costs. Those costs must be carried on the shoulders of a person already in debt.

debt collectorWhen there is no other recourse available, bankruptcy makes sense. Bankruptcy can cause damage to a credit score for up to ten years, and create a stigma that might haunt a person for quite some time.

Debt Settlement

Debt settlement on a credit card’s outstanding balance is often promoted as an easy way to pay off obligations. While better than bankruptcy and, certainly, better than default, debt settlement harms credit scores. Those who are behind in their payments and have no way of catching up might ponder debt settlement options, but do not execute this option unless no other recourse is available.

The running theme here is decisions have consequences. What might seem like a good idea at the time could end up delivering years of credit report woes.