In collaboration with MoneyPlus
When it comes to debt, it can be easy to fall victim to the many myths going around. There is often a lot of scare-mongering by people when the subject of debt is brought up and it can be tough to know where to begin.
MoneyPlus have written a fantastic article which serves to debunk some of the debt myths we are all led to believe. How many of these had you been told?
Photo by Avery Evans on Unsplash
I’ve shared a few myths here that I myself was led to believe at one point…
Your Bad Credit Rating Will Affect Those You Live With
I believed this for the longest time but in fact, it will only affect someone else you live with if you are financially linked with them – a mortgage would be a prime example of this. If you have separate accounts and don’t have anything joint, it won’t affect you.
Your Debts Will Need To Be Paid Off By Your Family When You Die
If there is money in your estate, then unpaid balances will need to be paid off using this. When my Dad passed away, he had two credit cards and some money in the estate. One had to be paid off in full, the other wiped the debt in a very kind gesture which they obviously did not have to do.
I’d always been under the illusion that we would need to pay off any remaining debts out of our own money and so it was good there was enough money in the estate but that isn’t the case. If there is no estate thus no money, the companies cannot make the family pay from their own funds. However if you have a joint debt with someone who has passed away, you are still liable to pay as the debt is still active.
You Will Face Prison If Debts Aren’t Paid
There are some debts that may carry a prison sentence but this is a last resort and very very rare thankfully. For most debts, however, this simply isn’t going to happen. It is only for certain debts and even then, is unlikely to happen.
These are just a few of the myths that many people believe – and there are so many more. I believe it is so important to be clued up on all things personal finance related and I try to keep myself updated with news. I even started my own personal finance blog as I find the topic so interesting and believe more should be done to taught people in the UK about these important things.
How many of these myths had you been led to believe?