If you reach a stage where you can no longer afford to pay your debts, you may feel guilt. After all, when you took out the loan or card, you signed to say that you would pay it back according to the agreed terms. If you are a man or woman of your word, breaching that word may be hard for you.
The truth is that you really don’t need to feel guilty, and here’s why;
Lenders risk assess people before giving them money
While it might seem that lenders hand out money willy-nilly, they carry out extensive research before doing so. Not only do they assess you and your credit history, but they research the overall market.
They know that not everyone they lend to will meet their debts on time. They know that some people will default, and some of those will go on to file for bankruptcy. Yet, their calculations tell them this is a risk worth taking because the overall profits will outweigh the losses.
Their attempts to get you to pay may seem personal, but in reality, you are just one of the many people they chase every day. They make it seem personal because doing so increases the chance you pay.
Imagine this: A particular lender has 5,000 people overdue on their debts. They send out a general email to all 5,000 asking if someone could please pay up. You’d probably think that if 4,999 people also owe money, why should you be the first to pay?
By making it seem like you are the only person in the world who is not keeping up with payments, you feel more pressure.
Debt problems can hit you out of the blue, and rather than feeling guilty about them, consider using bankruptcy to address them.
