You learn a lot in high school that you will most likely never ever use, well personally I never took anything away.

Geography is only useful if you’re an engineer. Diagramming a sentence is the duty of an English Professor and the Periodic Table is great if you’re a scientist! While there’s obviously space for these vocations in other professions, you get the general idea. With all the time that these kinds of subjects take up, there’s limited to no time left for your teachers to teach you things that everyone needs to know in the real world.

One of the subjects woefully neglected in schools these days is financial literacy, and considering our economic climate it should be made compulsory.

Financial literacy means understanding the basics of saving, spending, budgeting, tax and (last but not least) debt.

Nowadays everyone except for the extremely wealthy and the extremely frugal, will need to borrow money at some point in their lives. So fully understanding the risks and rewards of getting oneself into debt is vital for achieving long-term financial success. Unless you seek out and research that information yourself, chances are that you don’t know as much as you should about debt management before jumping into the deep end.

That’s understandable though, you’re reading this article, so we’ll assume that you’re ready and willing to educate yourself and become financially savvy.

While debt is a deep and wide-ranging topic, trust me it’s not as straight forward as people think it is, we’ll start simple.

So here are five of the most common debt questions people ask me, that many people are too afraid to ask, but should.

1. If you haven’t paid the debt in a long time, will it go away?

If you fail to pay your debts and fall behind, you can be guaranteed of being hounding by debt collection agencies trying to get you to pay again. These calls, SMS’s, emails and letters can be a miserable and cruel torture, and it will probably seem like they’re going to go on forever if you don’t do something about it.

We have good news, though: they can’t. Debt does in fact “expire,” just like anything else.

You’ve may have heard the term “Prescription” or of a “debt prescribing” used before?

If not see our write up’s on this subject:

2. When you die, what happens to your debt? Does it disappear or does someone else have to pay it?

There’s an old saying: “You can’t take it with you when you die,” “it” being your money. This phrase could just as easily apply to debt: when you die, your debt doesn’t die with you…unfortunately.

Your debt falls on your estate when you pass away; this is one of the major reasons why people take out large life insurance policies. In fact, it is to ensure that their estate will be able to discharge their debts when they die and ensure their significant other, and beneficiaries, aren’t left in the wake of a debt nightmare to sort out after their passing. The Executor of your estate handles the repayment process, cashing in your insurance, selling off of your assets, and sending out payments to your creditors until your debt is settled.

Generally speaking, if your estate runs out of money before settling your debts, your creditors just have to suck down the deficit. “BUT” some forms of debt, can transfer to other people even after you pass away.

Bonds and home mortgages, for instance, can pass on to whoever inherits your home. Generally, the home loan lenders will work with the heir to arrange a taking over of payments, although lenders can force the heir to pay off the entire loan balance at once.

I have personally experienced this happening to a client. So my advice to anyone with an unpaid mortgage is to insure that there is a life insurance policy in place, specifically in terms of the property left to an heir.

Credit cards are bit more of a murky area, joint account holders will be responsible for any unpaid bills, and spouses married  in community property will be held responsible for any debts run up while married. Otherwise, credit card providers will attempt to get payment from the deceased estate and then drop the issue.

So in short your estate will be used to pay off as much of your debt as possible when you pass. With secured debts and debts that involve other people (co-signers, joint account holders, or spouses married C.O.P for instance), credit providers generally have some recourse for seeking repayment past that. With unsecured credit agreements they’re generally out of luck.

3. If you marry someone, do you automatically become responsible for your spouse’s debt?

Good question, we like to think that love and finances exist on two entirely separate planes of existence… but unfortunately, that’s simply not the case. If you’re about to marry someone who is drowning in debt, or if you’re thinking about proposing but don’t want to drag your significant other financially down with you, then you’re probably asking yourself, “What happens to my debt when I get married?”

The good news is that your debt and your spouse’s debt won’t automatically become a shared concern when you get married. Your debts and credit histories remain separate, even if your spouse takes your name or vice versa “but”, once you are married, any new debts that you take on might affect both of you. Joint banking accounts, joint credit facilities, co-signed loans, and shared use authorization on credit cards; all of these wonderful financial benefits of marriage will end up on both of your credit reports and responsibility jointly shared.

Shared debts don’t follow “fair” repayment rules either; you don’t get to split the burden of debt straight down the middle. If you can’t keep up with your shared debt repayments, your spouse has to pick up the entire tab, it’s really no joke.

Another scary fact about “Community of Property” marriages is that even if your spouse takes on debt during a marriage as an individual, you might end up being held responsible for it, especially if the debt benefited you or your marriage.

Most couples are getting married ANC nowadays to protect each other in prevention of the above from occurring.

4. What happens if someone does not pay a debt that you’ve co-signed on?

Financial disputes between family and friends can get ugly fast, and one of the major causes of these disputes is co-signing for a credit facility. When you co-sign a loan for someone you’re agreeing to take on the debt if the other person on the loan can’t keep up with the repayments. It doesn’t matter if the loan is for something that doesn’t benefit you at all, such as someone else’s car or educational pursuits. If you co-signed, you’re held responsible to pay off the debt in full should the other not pay.

Because of this, if the other person falls behind and starts making late payments (or no payments!), those payments end up on your credit report and will damage your credit score. Debt collectors will start to call you seeking resolution. If those debt collectors decide to sue, be assured that they’ll sue you as well to guarantee restitution. If the credit provider decides to pursue repossession, or any other major legal action to recoup its losses, that action will show up on your credit report. Even though you didn’t actually lose any of your property per say.

Here’s something terrifying that you didn’t perhaps know, if the other person files for bankruptcy and the debt is discharged, the creditor can still come after you to repay the debt in full, even though the other person (whom the debt actually benefited) is now out of the picture.

On top of all of that, you don’t really have many options, if any, if the other person starts missing payments on the debt. You can either cover the short fall payments, get the person to refinance the loan in his or her name only, or, in the worst-case scenario, file for bankruptcy.

So here’s what you need to take away from this:

“don’t co-sign for someone’s debt unless you really know what you’re getting into and fully prepared to pay for it if they default!!!”

If you have anything less than total faith that the individual will be able to pay off the debt without a hitch, politely say NO.

5. If you can’t afford to pay your debts, what should you do?

The hope is that you’ll never get into a situation where you can’t afford to pay your debts, especially over a long period of time, but sometimes “life” just happens beyond your control. Look! The reality is that everyone misses payments now and then, and generally, if you catch up within a month, the consequences will be minimal if not at all damaging.

If you really start to fall behind, though, the consequences can be devastating and long lasting. You’ll damage your credit score, suffer harassment from debt collection agencies, and potentially even end up in court facing your creditor’s lawyers.

If you’re on that downward spiral and there’s no way to get your financial act together on your own, don’t panic, as you still have options available.

Debt relief comes in a variety of different forms and options, but all have the same basic goal: making your debt easier to deal with and manage so you can stabilize your financial future. We have the smart solutions on how to deal with your debt obligations; it will significantly lower your monthly debt installments due to the fact that you’re guided by specialists. Such as accredited Debt Counsellors and certified Senior Paralegals.

Our debt settlement programs come with a monthly repayment scheme; which means that you’ll have the convenience of paying all your debts without sacrificing your budget allocated for other living expenses.

Through effective negotiations with your creditors, these programs can lower the actual amount of your monthly combined debt repayment by an average of 40-60% (based on actual client scenarios).

All of our debt settlement programs come with expert industry related assistance and legal counselling. Oyisa United Debt Specialists is therefore committed to assisting consumers struggling to make their debt repayments and facing financial difficulties, to solve their debt problems and empower them to take back control over their financial situation.

If you need a hand figuring out what to do with your debt and what your best debt relief option might be, the experts at Oyisa United Debt Specialists can help. We’ll put together a debt repayment plan that makes sense for your unique financial circumstances.

We’ve helped scores of people in similar financial situations to get out of debt. Contact us today and let’s get started bringing you peace of mind!