Does Doing Debt Relief Make Me A Bad Person?

No, doing debt relief doesn’t make you a bad person! We all sometimes feel a moral obligation to repay back debts we owe and want to make right on what we can. However, life can happen and when it does, there are often times solutions to help us get back on track. It’s not always easy to get back up once you’ve fallen. Debt relief can be the boost many need in order to get back on their feet. There’s no harm in taking advantage of that boost!

But I Borrowed This Money Shouldn’t I Pay It Back in Full?

Well, have you ever actually calculated how much you’ve paid back on your debt so far? Ask yourself how long you’ve been making minimum payments? For example, if you owe $50,000 in credit card debt and you pay $2,000 a month in minimums for 3 years (36 months), you’ve already paid $72,000 towards that $50,000 balance. So, your creditors have already gotten the principal back plus interest on what you’ve originally borrowed.

Given this information, it’s easy to see that many people have paid back their creditors in full, depending on the length of time they’ve been actively paying on their accounts. In some instances, consumers have even paid back double, triple or quadruple what they initially borrowed. In these scenarios, creditors are getting made whole and they are still profitable. Adding a settlement towards the end is just letting putting a cherry on top (of additional profit).

Did You Intentionally Try to Get into Debt?

Most people who carry debt and have fallen under difficult economic times did not do so with misguided intentions. We all mistakes, whether financial or otherwise. However, our main motives behind what happened should help guide us regarding our moral and even religious belief system. People aren’t by nature evil or ill-intentioned, for the most part we all try our best to make do with what we have. If that’s not possible there are options to help us eliminate debt and have a fresh start.

Will Creditors Not Maintain Relationships with Me?

If you have an established banking relationship, most banks will in fact maintain ties with you or at the least allow you to re-establish accounts it in the future, if you are closing any of them out due to settlement. Any accounts you plan to settle will have to be naturally closed out, so always bear that in mind.

Will This Affect My Relationships with Other Creditors?

This will not and should not affect your relationship with other creditors but there is something called universal default. When you default on any one account, creditors are notified about this and there is a possibility it affects the credit limits and established lines of credit you have setup with other creditors. If one creditor notices you completely defaulted on one account, they are much more likely to close out one of their accounts in order to limit their exposure to risk.