How Long Standing Debt Affects Your Future

By: Michael Millington

Dealing with debt can be a long, drawn out battle. Many obstacles can get in the way of your ultimate goal of debt elimination, but get overshadowed by the prospect of trying to throw enough money at debt in hopes of wiping it away. Debt seems to stay in our lives forever with or without our say so. Long standing debt can be especially bad as it has a prolonged effect on your financial standing as well as your credit health. Here are a few ways long standing debt can be detrimental to you.

 

Creditors Won’t Trust You with Long Standing Debt

Long standing debt means that no matter how long you have this debt, there is always something you will owe. While creditors do appreciate the act of making payments in a timely fashion, they also like to see little to no debt in existence with them. The sooner you pay off an outstanding debt the better you look to other creditors you might want to borrow from.

The best way to keep creditor faith on your side is to maintain constant communication with them in regards to your payment plans. Even if you keep a debt for a long period of time, the act of getting in touch with your creditor to set a payment plan is enough to put them at ease. Having a personal relationship with your lenders goes a long way towards achieving your credit and debt goals for the future.

It might seem like going the extra mile to maintain lines of contact with your creditors, and it is. But even if you can’t pay the entire balance, it still helps you avoid some very bad outcomes. Creditors can send your debts into collection if they deem you’ve been taking too long to pay back a certain amount. Having a debt go into collection can be a horrible mark against your credit and is hard to negotiate with debt collectors. To avoid the annoying calls and threatening letters, make contact with your creditors and work out your debts with them first.

 

Big Purchases Won’t Come Easy

When you have a long standing debt it becomes harder to trust you with money. When you have a purchase that would require a loan (i.e. a car or a house) creditors will want to know that you have a history of paying off your debts. A long standing debt will look like you never intend to pay off what you have borrowed. Putting a creditor in this mindset will make it next to impossible to pull off big purchases.

Long standing debts tend to get out of hand because your principle amount becomes overshadowed by interest and late fees. In order to look like a responsible borrower to lenders, you must keep your debt just under 20% of the total amount you’ve borrowed. It’s widely accepted that 20% is the amount that will keep your credit in good standing. If total debt elimination is out of your immediate scope then work towards getting your debts down to 20%.

Remember that loans for large purchases are based on how good your credit is. If you can avoid a secured loan then you’ll be in better shape for your credit needs. In the event you have to take out a loan with collateral attached make sure that loan holds priority in repayment. This is another reason you’ll want to keep in contact with your creditors, as late or non-payment of your secured debt can lead to the repossession of your assets.

 

It’ll Be Harder To Retire             

Retirement planning can be disrupted when you have to allocate money away from daily living towards an outstanding debt. Debts aren’t going to wait to be paid. It takes strong financial management to make debt work in your favor, but without a plan, long standing debt can not only drain your funds in the present but also in the future. Carrying a debt into your later years might cause you to put retirement on hold longer than you want. In some cases you might never retire because of a long standing debt.

In order to keep your retirement funds safe and your plans on course, consider talking to a debt settlement professional to handle your long standing unsecured debts. Debt settlement can help reduce the total amount of debt you have while bringing you towards your goal of debt elimination in a short amount of time. The best thing about this course of action is it puts your debt under control and in your hands.

Using a debt settlement professional can result in getting your fees reduced to nothing, while also having the ability to lower the principle amount of money you pay. You make deposits to a secure escrow account while your debt settlement professional informs you of your available options. With dedication you can settle your debts within 24 months and achieve your goal of debt freedom faster than ever. Guardian Debt Relief can help secure you a debt free future as they have done with many others. With a BBB A+ company in your corner your chances of reaching debt freedom are within your grasp.

 

Secure Your Future

Planning for your future can be an exciting time if you don’t consider debt related issues. Paying off creditors isn’t the most fun thing you can do in your later years, but not handling your debts can lead to disastrous effects down the road. Make sure you take the time to settle your debts before you end up lacking the trust of creditors and unable to enjoy your days after work. Take the first step towards debt freedom and seek some professional help today.