Debt

Debt

Good Debt vs. Bad Debt

First, let's differentiate between "good debt" and "bad debt." Good debt is a mortgage, and anyone who has a house more than likely either has a mortgage or has had one in the past. Student loans are also considered good debt--until the repayment period begins, that is. The reason for student loan debt (getting an education) is good, but the payments are usually high. The good news is that you can write off a portion of your student loan debt and interest on your mortgage when you do your taxes.

Bad debt is most generally credit card debt or any other kind of unsecured debt. Generally this kind of debt can be avoided, but there are times when it can't. Think of it this way, do you really want to pay interest on a pair of shoes or a CD? Probably not, especially since this kind of interest can't be written off on your taxes! On the other hand, there are times when you need to use your credit card (for example, when your car breaks down, when you need to rent a car, etc.). And debt due to medical bills also cannot be avoided.

Good Debt Management Companies vs. Bad Debt Management Companies

Whatever the reason for your debt, help is available. First you have to choose a good debt management company, so we should start by differentiating between a "good debt management company" and a "bad debt management company." A good debt management company will get a complete assessment of your financial situation before making any recommendation to you about which debt management program will be best for you. They will answer any questions you have willingly, and without being evasive. They may even offer a debt counseling program as part of their plan. This way you can learn how to budget, how to use credit wisely and how to develop a savings account.

A bad debt management company will suggest that you get a new identity to start over and wipe the slate clean. A bad debt management company might also promise to erase bad credit from your credit record. Nobody can do that. You can improve your credit rating with a good debt management company, but you can't remove past "black marks." (They will drop off eventually, but only after several years. A debt management company cannot make that happen.)

Until you do something about your debt, you will continue to pay interest and finance charges, so the longer you wait to start a debt management program, the more your debt is costing you. Don't delay! Get debt help today!

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