Wednesday, March 28, 2007

Paying Back Debt Honorable Thing To Do

Paying back your debts is the honorable thing to do. Whether you owe your friends, relative or loans from banks or financial institutions. Its is always important to settle you obligations to keep your good name in tact so you can borrow again when the need arises. Banks and credit card companies keep a record of people who default on their payments, people who are included on the list will find it very difficult to obtain any type of loan whether its an equity loan, personal loan, home loan or a car loan. Filipinos value close family ties and friendship, so If you obtain your loans from friends or family members and you end up not paying them, your relationship be strained and they would probably would not want to see you again. That would be devastating for both parties.

But what if you are already up to your necks in debt? Is this a good excuse not to longer pay your obligations? I am a firm believer that one must settle his or her obligation and no matter how bleak the prospect of you actually settling the debt, you must try because its the right thing to do. The proper way of settling a debt is to talk to the concerned parties. Tell them that you no longer have the capacity to pay back your loans but you are willing to cooperate with them to work out some kind of a deal, and ask them to stop charging you interest if any so what you owe them does not balloon up. The best way is to pay them back a fixed amount every month, no matter how small the amount maybe. Every payment is a step closer to settling your debt. Most will welcome this proposal and will gladly accept your offer.

The best way to avoid being in debt is not to incur debt in the first place. Do not buy non essential things and know your financial capabilities before getting a loan to buy that hot new car just because you neighbors are buying a car or mortgaging you house because of a gambling habit. You might just wake up one day and your car or worse, your home is being repossess by the bank and you end up staring at financial ruin.

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