Throughout your life you may have heard stories of people who found themselves in difficult financial situations. These stories may have resulted in you becoming very aware of your own finances as you became an adult, and you may have worked hard to stay on top of your financial obligations. However, just like any other Ohio resident, you could find yourself facing an unexpected situation that could result in you accumulating considerable debt.
You may have felt completely caught off guard by this type of situation, but job loss, a medical emergency or other similar events could have easily dismantled your well-crafted financial plan. Unfortunately, this could happen to anyone. On the bright side, you do have alternatives for effectively addressing your debt. However, there are certain options you may want to avoid.
Using retirement funds
As part of your financial plan, you undoubtedly took the time to plan for retirement. You may have an IRA and a 401(k) that house funds for use during your retirement years. Now that you are struggling with debt, you may consider taking some of those funds out early in order to cover your outstanding balances. This action could cause more harm than good as early withdrawal could come with penalty fees, taxation and other negative financial impacts.
Gambling
Though some people do have luck when it comes to gambling, this route has no guarantee of allowing you to gain more money. In fact, gambling could result in you putting up already limited funds only to lose those funds and potentially fall even deeper into the hole.
Taking money from family or friends
You, like many others, likely have supportive friends and family. When faced with financial struggles, those friends and family members may want to step in and provide you with a loan to cover your balances. While you may think that this option could work better than others, you may want to remember that relationships could face negative consequences if you do not repay the money on time or if the person who loaned you the money feels a sense of entitlement when it comes to commenting on your purchases.
Reliable options
Rather than taking the risk of dealing with a less-than-reliable route for debt relief, you may want to consider filing for bankruptcy. Though you may balk at the idea of heading down this avenue, the more information you have about bankruptcy, the more you may understand its benefits. Therefore, you may want to gain reliable facts on this process from local legal resources.