Debts

Debt: Money owed to others, often for significant expenses like cars, education, or medical needs.

Types of Debt:

Good Debt: Helps achieve dreams, improves financial prospects, and adds value to life (e.g., investing in education or property).
Bad Debt: Used for non-essential purchases or items that lose value over time.

Common causes of debt:

Paying Off Debt:

Methods to pay off debt:

Snowball Method: Focus on paying off the smallest debt first, then move to the next smallest while making minimum payments on other debts.
High Rate Method: Prioritize debts with the highest interest rates first while making minimum payments on other debts.

Bankruptcy: A situation where a person or company cannot pay back their debts and asks the court for help to resolve the situation.

Causes of bankruptcy:

Debt: Money owed to others, often for significant expenses like cars, education, or medical needs.

Types of Debt:

Good Debt: Helps achieve dreams, improves financial prospects, and adds value to life (e.g., investing in education or property).
Bad Debt: Used for non-essential purchases or items that lose value over time.

Common causes of debt:

Paying Off Debt:

Methods to pay off debt:

Snowball Method: Focus on paying off the smallest debt first, then move to the next smallest while making minimum payments on other debts.
High Rate Method: Prioritize debts with the highest interest rates first while making minimum payments on other debts.

Bankruptcy: A situation where a person or company cannot pay back their debts and asks the court for help to resolve the situation.

Causes of bankruptcy: