Granted, debt is not something to be happy about. In any case, individuals would do anything not to get into debt. Unfortunately, that is not always the case if the number of people deep in debt is anything to go by. We all have read, encountered or even personally know friends, family or colleagues who have filed for bankruptcy as a result of debt. The fact of the matter is, there are individuals who get into debt because of imprudent financial management, others because of unforeseen circumstances such as a job loss and others because of a wrong investment. Whatever the case, debt is not a badge of honor and is a state that everyone loathes. In this regard, what are some of the most common reasons as to why people get into debt?
Expensive medical bills
Someone might argue that with the availability of medical insurance, debt as a result of expensive medical bills should be a thing of the past. However, the reality of the matter is that not everyone has a medical cover and as a result, when they get ill and hospitalized for a prolonged period of time, expensive medical bills might plunge them into debt. Even those with medical plans are not safe as the plans cover 80% of the costs and the individual covers the remaining 20%. Prolonged hospitalization in this case can make a person to get into debt in order to pay their medical bills.
If you have no income or you suddenly lose your job, meeting basic needs become a herculean task. You find yourself taking things on credit, unable to pay mortgage, credit card bills, car loans, school fees and so on and so forth. The only logical means to meet basic needs is to get into debt. Those who were in employment and suddenly get laid off find the going tough especially as their savings is getting depleted and as such might be forced to get into debt as a way of making ends meet.
Most people are under the illusion that a divorce is all about sharing assets in half. However, what most people are unaware of is that if a spouse is deep into debt and the divorce is not yet finalized, creditors will always come after them to recoup money owed by their partner. That aside, the divorce process is a lengthy one not to mention expensive and therefore at the end of it all, a person might find himself in debt.
You probably have come across these types of lenders who promise to offer loans to individuals who can’t get access to loan from mainstream financial lenders. Most of these lenders are predatory and simply prey on desperate individuals to offer them loans at extraordinarily high interest rates. The result is that a person soon enough finds themselves unable to repay the loan and as such get deep into debt. As if that is not enough, such predatory lenders never hesitate to auction the borrower’s property to recover their highly priced loans hence making the borrower get deeper into debt.
To sum it up, the above mentioned reasons have led most people across the globe to find themselves grappling with debt. People have to survive and when they don’t have the means, getting into debt always seems like the next best alternative. However, the situation is not as bleak. If individuals prudently managed their finances, developed a saving culture and took to investments when financially secure, getting into debt would be a thing of the past. Individuals across the UK should always work towards attaining zero debt at all costs.