Once you get into debt, it’s incredibly hard to get out of, so you want to avoid it as much as possible. That’s why it’s so important that you’re aware of the common causes of debt. Sometimes, people get into debt because of bad spending habits but more often than not, people end up in debt because of things that are completely out of their control. People get the wrong idea about debt and tend to blame people for having poor spending habits. But it’s usually outside factors that cause financial hardship. So, if it’s out of your control, how are you supposed to stop yourself from getting into trouble? Knowing what the dangers are and how to tackle problems when they come up is the first step. Here’s how to deal with the common causes of debt that aren’t your fault.
Unpaid wages are a bigger problem than most people realize. That’s because they have a misunderstanding of what it actually means. It’s difficult for employers to get away with not paying you anything at all because there are laws in place to stop that easily. But your employer could be taking money from you without you even realizing. All it takes is a few hours of unpaid overtime here and there or an automatic deduction for a break that you didn’t take. All of that money will add up over the years and it could amount to thousands of dollars. If you’re not getting your full wage, you’ll find it a lot harder to cover all of your living costs and you could end up having to borrow to make ends meet. The good news is, you’re legally entitled to those wages and there is something that you can do about it. Visit https://turleylawfirm.com/practice_areas/san-diego-california-wage-and-hour-attorneys.cfm for more information on how to find a wage lawyer that can help you recoup the money you’re owed and make sure that you’re getting paid in full in future. Getting all of the money that you’re owed can really help you to manage your finances a lot better.
Debt collections are ruthless and they’ll use all sorts of tactics like sending letters, calling you on the phone and eventually trying to sue you. That’s hard enough to deal with if you actually owe the money but what if the debt isn’t even yours? False debts can happen for a number of reasons; a debt that you’ve already paid off might accidentally end up getting sent to a debt collection agency. Some dishonest debt collection agencies may even create a fake debt and start sending collection letters in the hope that people will be frightened into paying a debt that isn’t theirs. If this happens to you, you need to dispute it. Once you open a dispute, they have to stop collection efforts and prove that the debt is yours. If they can’t do that, it will be removed.
Errors On Your Credit Report
High interest payments are one of the major reasons that people end up stuck in a cycle of debt. People usually end up taking out high interest loans because they’ve got a bad credit score. In some cases, that will down to your financial past but sometimes, your credit score is affected by errors on there. Just like false debts, you can dispute these errors. Visit https://www.myfico.com/credit-education/credit-reports/fixing-errors for more information on the dispute process. It’s up to you to provide proof that you’ve paid off the debt in question already, or that the debt was never yours in the first place. It’s always a good idea to keep records of any debt repayments you’ve made. You should be able to get copies of your statements from the bank that show your repayments as well. If you can’t prove that there are errors, you won’t be able to get them removed and your credit score will suffer.
Injury And Illness
Injury or illness can strike at any time and if it’s serious, you might be unable to work. That loss of earnings can quickly lead to a lot of debt if you don’t have a plan in place to deal with it. You need to start preparing for this eventuality ahead of time by putting away some money each month into an emergency fund. That way, you’ll have some money to live on while you’re out of work and you won’t have to rely on borrowing to cover all of your living costs.
Debt can come from bad spending habits but, unfortunately, it’s often caused by things that are completely out of your control. The good news is, you can deal with those problems and avoid debt if you prepare for them properly.