Repaying your debts is an agonizing process as you feel like you’re spending a lot of money and seeing no reward from it. Of course, the overall reward is a debt-free life, but you fail to see how beneficial that is at the time! As a result, many people will put off debt repayments or make minimum payments to delay spending lots of money. This can seem like a smart idea as you are pushing the payments back and you might have time to get your finances in check.
Nevertheless, it is rarely beneficial – especially if you keep putting off debt repayments month after month. To showcase just why this should be avoided, here are three reasons you should stop putting off your debt repayments.
What do you think happens when you default your payments and keep putting them off? Are your creditors going to stand by and let you do this? No, they’re going to take action, and this starts in the form of debt collectors. They can send people to your house or get a debt collection agency to bombard you with phone calls and emails every single day.
Needless to say, this is incredibly frustrating and scary. It’s horrible to deal with debt collectors, especially when they become aggressive or threatening. Thankfully, if you need help with debt collection, there are organizations you can call or notify that should help get the collectors off your back.
Significantly More Debt
Putting off your debt payments is rarely a smart idea as it means you end up with more debt to pay. Now, perhaps there is one instance where this could work in your favor. Maybe you delay paying your credit card bill for one month because you had a rough month and are waiting to get paid in a week or so. When the money comes in, you’re able to repay the debt that you put off right away.
However, you still have to pay more, and it is a lot worse in many other scenarios. When you delay paying debts, creditors slap all sorts of charges and fees on your account. There are late payment fees, interest charges, and many others. All of this adds to what you already owe, meaning you are in more debt than you started. This is how you end up on a slippery slope to an endless debt cycle.
Yes, putting off debt repayments can lead to legal action against you. Creditors could sue you or demand the court let them do certain things to get money from you. This could include taking a portion of your wages every month, or it might mean they’re allowed to seize certain assets – like your house or car – to cover your debts.
As you can see, putting off repayments is not a smart idea at all. It can be hard for your finances if you do this, and you should always look to pay your debts on time when possible.