Giving DEBT debt the once-over
Many Florida residents carry some form of debt. While they may have a negative view of owing money, financial experts are quick to note that there are different types of debt. In fact, sometimes owing money can actually be positive and beneficial to one’s overall financial health.
For people who are concerned about their situation, reviewing their debt profile and understanding how each type of obligation functions can be a good first step toward getting their finances under control. For example, student loans can further a borrower’s career opportunities, while the interest on mortgage payments are with some limitations tax deductible. Mortgages also have other benefits. Consumers who take out debt to find themselves a place to live are actually making investments in their futures, as real estate often gains in value over the years.
Some types of debt, however, present problems. High-interest credit cards, payday loans and even many vehicle financing products seldom benefit consumers. This is because there is no investment in this type of debt and the value of whatever has been purchased depreciates over time. In addition, as the interest compounds, borrowers may find themselves in a “debt pit” that they can’t get themselves out of.
Individuals who feel that they have too much of the negative kind of debt and who are finding it difficult to get out from under their obligations may want to meet with a lawyer to discuss the possibility of filing for bankruptcy. The two forms of consumer bankruptcy that are most frequently used are Chapter 7 and Chapter 13, and legal counsel can explain the requirements of each while exploring other debt relief options that may be available.