Most people are afraid of debt, especially as they get older. The idea of carrying debt under your name holds a significant problem as you try to pay your bills, pay for a home or even retire in the future.
However, carrying debt is also very common. Many people have debt in one form or another due to a variety of circumstances.
Most common forms of debt
If you know the most common forms of debt, you may be able to avoid and prevent significant financial damage from bills in the future. The most common forms include:
- Medical bills – It’s well known that many Americans suffer from debt due to medical expenses. You never want to delay your health treatments, so many people do not have the funds to cover their treatments. Some people rely on health insurance or an emergency fund to cover the costs, but it usually isn’t enough.
- College loans – As more people attend college or university, many folks rely on student loans to cover the costs of tuition, books and living. It racks up quickly, and most people end up paying off their student loans for years afterward.
- Divorce – When a marriage ends, it affects both spouses emotionally and financially. Divorce usually ends with both parties with significantly less money and assets than before, and there are major legal costs that are included in the process.
- Gambling – Many people suffer from gambling addictions or a gambling disorder. According to Debt.org, 23 million people in the U.S. go into debt, with an average loss of $55,000. This only adds to any other financial problems that may be present in your life.
These are just four common causes of debt. There are dozens of ways people find themselves in debt, but there are also dozen of ways that people can dig themselves out of debt and help themselves recover financially.