Stay away from debt as much as you can. This is what our 
conventional wisdom says. But is this possible in reality? Not at all.
Debt is a necessity for 99.9% of Americans. They need it for pursuing higher studies, buying apartments, purchasing clothes, and so on.
When someone borrows as per his means, he can live comfortably. But if the debt is uncontrolled, it becomes overwhelming for that person.
A basic understanding of debt myths and facts is necessary to make best decisions for your financial well-being. Here are six common debt myths and the truth behind them.
Myth 1: Retailer credit cards are the best deals
Not at all.
Go through the fine print. Find out what will happen if you don’t pay the full balance every month.
Retail credit cards sound tempting when you hear about rewards and interest-free financing. You can purchase something with the retail card and pay it off over a few months. But what happens when you can’t pay the entire balance in the stipulated time? You pay an exorbitant interest on the total balance. Usually, this rate is higher than what you pay for a traditional credit card.
Myth 2: A debt management plan (DMP) hurts your credit score
FICO doesn’t penalize consumers for paying off debts with a debt management plan. When you make regular payments on your credit cards after enrolling in a DMP for several months, it has a positive impact on your payment history. This may help to boost your credit score since 35% of your score is payment history. On the flip side, if you make late payments, your credit score may go down.
When you enroll in a debt management plan, make sure you make monthly payments on time so that your liabilities are paid in full at the end of the repayment period. Be extremely careful when you’re choosing a credit counseling agency/debt management company because if they don’t disburse your payments on time, you’re the only one who will suffer.
Myth 3: The day you get hitched is the day when you marry debt
Many couples assume that their debts get merged after walking down the aisle. Usually, this is not the case. Many couples pay off debt together after getting married. That’s quite common. But neither spouse is responsible for paying down debt that the significant other incurred before exchanging their wedding rings.
Myth 4: Bankruptcy is the worst debt relief option
It’s true that bankruptcy is not the best debt relief option since you give up all your attempts to pay off debt. Bankruptcy stays on your credit report for 10 years, and potential lenders may not like it. But this is only a part of the story.
Contrary to popular opinion, bankruptcy can help to improve your credit score. When you discharge debts with bankruptcy, your credit-utilization ratio drops. This has a positive impact on your score.
If you’re planning to file bankruptcy or have any query, call at 1-800-920-2262 to clear your doubts. You can also send an email at bkhelper@debthelper.com or read the Frequently Asked Questions for clearing all your doubts.
Of course, a credit card consolidation program or a debt management plan is better than bankruptcy, but it would be wrong to say that bankruptcy is totally bad. No one should predict the exact repercussion.
Myth 5: Your joint debts are separated after you get the divorce decree
While it’s true that a divorce decree helps to separate marital debts, the same thing can’t be said about joint debts. A divorce decree doesn’t break your agreement with your lender. He has no idea about your divorce. That is why the joint account is still there on your credit report.
Call your creditor and inform him about the divorce decree. Discuss with him the possible ways to place the joint credit card account in the name of your ex-spouse. Ask the creditor to remove your name from the account.
Myth 6: Bankruptcy is your only option when you have massive debt
Bankruptcy is not the only way to pay off large debts. Apart from the debt management plan, there are other debt relief options to help you discard a huge amount of debt. A debt management plan gives you an affordable monthly payment plan, whereas a debt settlement program helps to lower the payoff amount. Both the debt relief plans have a few advantages and disadvantages. You can compare them and choose the one that suits your financial situation.
Just remember one thing: No matter how bad your financial situation is, you shouldn’t lose hope. Be patient, lead a frugal life, and make additional payments to knock out debts quickly.
