Most New York residents have likely heard some version of the phrase “money makes the world go ’round.” While many people — including yourself — may agree with this sentiment, you in particular may have a disdain for this widely accepted notion due to your financial problems. Though many people face some sort of debt during their lives, your liabilities may have become considerably overwhelming.
Because debt issues can often cause stress, anxiety and even contribute to physical ailments, you certainly want to find the best way to manage your outstanding balances. However, certain options that may seem to have quick benefits may not actually offer the best routes for handling your financial situation. Therefore, you may want to avoid the following avenues.
Using retirement funds
Many people often wish that they could tap into their retirement accounts early to access funds just waiting for use. However, depleting these funds can have a considerably negative impact on your future. Though you may have heard of people taking out loans using their 401(k) funds and paying the loan back, this option may not suit your needs, as you could face penalties and immediate repayment if you leave or lose your job.
Using your home as collateral
If your debt issues stem from unsecured debts, you may want to avoid borrowing money against your important assets, such as your home. With unsecured debts, creditors do not have specific property that they could repossess in the event that you do not make payments. However, if you decide to borrow money against your house to cover certain debts and then fall behind on your loan payments, you could end up in a worse situation due to your home potentially going into foreclosure.
Taking loans from loved ones
Though family or friends may be quick to offer you a loan, taking them up on this offer could have negative impacts. They may believe that they are helping you during a difficult time, but they may also find themselves judging your purchases and becoming critical of your financial situation. Additionally, if you do not pay the loan back quickly, relationships could turn sour.
Rather than looking for a quick fix that could have negative effects on top of your already difficult financial situation, you may want to explore more reliable options. Personal bankruptcy is a process that could take time to complete, but in the end, many people find themselves facing a vastly improved debt situation. If interested, you may wish to gain more information on this type of debt relief to determine whether it could suit your needs.