When it Comes to Debt Relief, Proactivity Pays Off

After working like a dog at the office, the last thing you want to do is come home to a list of household chores; but you always do. The lawn needs cutting, dinner needs cooking, and the laundry needs washing. Your daily routine is so cram packed with responsibilities that you rarely get a little time for yourself -- and when you do, the last thing you want to spend your cherished time on is thinking about your debt problem.

Assessing your personal debt and determining the best path to financial freedom isn't easy. It takes a lot of time, research, and contemplation to figure out what will work best. And let's be honest -- it's not the most pleasant of experiences either. Thinking about your debt can arise stress, anxiety, and even depression. This, unfortunately, is why it's so easy to procrastinate when it comes to addressing personal debt.

There's a number of things in our lives that we put off in order to avoid dealing with the pain that they present. There's visiting the in-laws, dentist and doctor appointments, and asking about that promotion, but none are dreaded more than taking on a debt problem; and unfortunately, none are more costly, either.

If you're like most people that are stuck in debt, you make enough money to scrape buy each month. You're able to cover the mortgage, put groceries on the table, and most of the time you are able to cover the minimum payment on your monthly credit card bills. You think that since you're getting by alright, it isn't essential that you try and solve your debt problem. You might think differently, however, if you knew the true cost of your inaction.

Credit card debt and other personal loan agreements are among the most costly of longterm contracts. They are not designed to help you in a financial pinch -- they are designed to get you in debt and keep you stuck there. Between the compounding interest and outrageous late fees, a debt that started as a meager loan could require a fortune to pay back. Here is a hypothetical example to illustrate the point:

If an individual that holds $25,000 in unsecured debt at the national average 15% interest rate only makes minimum payments, it would take five years to have paid a total of $27,998.58 -- and of that, $10,470.62 went to interest, leaving a remaining balance of $10,525.32.

In this hypothetical, it will take over a decade for the debt to be paid, and by the time it's over, the principle will have been paid almost two times over. This doesn't take into account the occasional missed payment or late fee, either. If you find yourself in this type of situation, a solution now can mean the difference between financial freedom and a future mired in debt.

There are several debt relief solutions out there that will allow you to avoid a lifetime of making minimum payments. Whether it's bankruptcy, debt settlement, or something else, it's impossible to say which will work for any individual situation without a full assessment of the debt and other financial figures. What is certain, however, is that a proactive approach to debt relief pays dividends for the future.