Debt Traps: Proceed With Caution
Second mortgages can be a very bad trap for you. That is, you have been paying on your home mortgage for awhile and can now use the part of the house you have already paid for (your equity in it) as collateral on another mortgage. Therefore, you are right back where you started from. Unfortunately, it is the person who is deeply in debt already who is encouraged to get a 2nd mortgage. The idea is that this additional loan can be used for whatever you want and it is very tempting.
We continually see TV commercials for 2nd mortgages to pay off your huge debts. Does it really make sense to you to take on even more debt in order to pay off old debts? No, you know it does not. And as you will see by the end of this guide, there are a lot of other ways to take care of those debts.
Monthly bills are those that are just like dirty dishes - as soon as you pay them off, it's time to pay them again. They are a major form of debt but for obvious reasons cannot be handled the same. That is, there is nothing you can do about their regularity. However, you can work to cut them down to a more manageable size.
We mention gambling fully realizing (and certainly hoping) that most people do not owe gambling debts. However, there are some readers who may be running up cash advances on their charge cards or other loans in order to pay for their gambling habit. Some people spend $20 or more a month on lottery tickets. These are not a good investment unless you consider it just part of your recreational expense. If you find yourself with gambling debts, please find professional help for this problem. We cannot give you any other help for this type of debt. Only you can help yourself with this particular kind of debt.
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