Is Debt Bad?

Is Debt Bad?TOO MUCH DEBT IS BAD: it’s bad for governments, it’s bad for companies and it’s bad for individuals and families. In it’s worse scenario it can lead to bankruptcies, closed businesses, lost jobs, family stress and many other unpleasant life circumstances. However, handled appropriately, debt allows people, organizations and government to do things that they would otherwise not be able to do.

Commonly, you and I use debt to purchase houses, cars and many other things too expensive to purchase from our personal savings.

Companies use debt to leverage investment and productivity.

However, for both companies and individuals, the increased risk of assuming too much debt can lead to poor results, as the cost of paying the interest on the debt can grow beyond the ability to pay it, especially if income loss, bad management, economic factors, emergencies or any other financial difficulties.

Note, however, that in these examples debt has been used frivolously.

If you have extended your debt capacity, you can take advantage of debt negotiation services to get your current debt load under control. However, unless you are a bank or a government – who seem to be able to get away with irresponsible use of debt – you will need to ensure that you more carefully manage your debt in the future.

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