Debt Relief

Debt Help

Debt Relief

15th May 2007

What does debt relief mean? Let's look at the two words seperately and then combined. If we break it down we get debt and relief. The Concise Oxford Dictionary describes the two as follows:

Debt - 1. smething that is owed, esp. money. 2. a state of obligation to pay something owed (in debt, out of debt, get into debt).

Relief - 1. the alleviation of or deliverance from pain, anxiety etc. b. the feeling accompanying such delivarance 2. a feature etc. that diversifies monotony or relaxes tension 3. assistance (esp. financial) given to those in special need or difficulty (rent relief).

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Now we combine debt and relief and get a definition of debt relief from Wikipedia as follows:

Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. It concerns in particular Third World debt, which started exploding with teh Latin American debt crisis (Mexico 1982 etc.).

In recent years, personal debt has increased at alarming rates and it is now a major socio-economic problem. For most people it is not very difficult to acquire large amounts of credit debt in a short period of time. The average American household has a debt of $9,200 in credit card debt alone. Credit card debt is the most common form of debt that Americans are faced with today.

Credit cards often have the highest interest rates ranging from the mid to high teens. With such high interest rates, the debt load increases and this makes repayments on the debt ever increasingly difficult to maintain. It is in this scenario that payments are missed and the debt situation starts to spiral out of control and ends up in severe bad debt.

When the debt situation is becoming bad, seek ways to improve or aim to alleviate bad debt by weighing your financial options. This can include debt consolidation for which there are companies that offer debt consolidation services. Admittedly, debt consolidation companies are not always the best option and there are those bad apples. To be on the safe side seek debt advice firstly from an independent consumer association. You should approach consumer associations first before going to debt consolidators. Consumer associations are equipped with the necessary experience and extensive knowledge on how to deal with bad debt situations and they are most likely to advise you of the best ways to get debt relief.

"The final outcome of the credit expansion is general impoverishment." - Ludwig von Mises

Comments (5):

Kevin Says: I worked through a consumer association so I never had to deal with debt consolidators I have heard some hair raising stories about consolidation companies | 05.15.2007 |

Alex Says: Debt relief is good but you shouldn't just go there rather try and settle your debt first on your own. That is the advice I was given by consumer association | 05.15.2007 |

Terrence Says: I am in debt but no too bad. I've been paying off slowly however at a point I was so ready to for debt relief but when I spoke to some consolidation lawyers they told me it was better to try and pay off the debt by myself because there are costs involved with debt relief programs | 05.15.2007 |

Shamise Says: It is too easy to get credit I think. Although things like credit cards are supposed to make our lives easier I find that we end up in a lot of debt | 05.15.2007 |

Henry Says: How did we end up in this mess anyway? I hear that a lot when people talk about personal finances I think the solution to debt is just to work on a cash basis | 05.15.2007 |

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