The word debt comes from the Latin 'debitum' meaning 'thing owed'. It is typically money that is outstanding from one party to another however; it can also refer to goods or services. Usually debt is to be repaid under the obligation of a contractual agreement on the basis that it will be returned, plus interest, on or before an agreed date. So, in essence, debt is a transaction undertaken by two parties whereby one party chooses to put off turning over their side of the deal immediately.
The opposite of debt is known as 'credit' and credit is used to describe the goods, services or monies that are being given to the debtor by the lender (also known as a creditor). Many people will have access to credit at some point in their lives and the common forms of personal credit are: unsecured and secured loans, credit cards, store cards and payday loans.
Debt can affect people in different ways but more often than not the connotations surrounding the term are negative. One of the main benefactors of stress in 2012-2013 has been reported as being in relation to financial worries and more significantly, debt. In fact, the results from the 2013 Financial Literacy Survey have uncovered that approximately 61 million people in the US feel worried about being unable to meet their outstanding debt obligations. The vast majority of people with loans or cards do want to re-pay their debts, but when they were initially obtaining the credit they did not realise how difficult it can actually be.
Therefore it would seem fair to suggest that debt can cause stress and in turn we know that stress can cause ill-health. Many individuals or families who are struggling to meet re-payments and who may have to cut back on necessities such as food or utilities often experience high blood pressure, headaches, fatigue, anxiety and depression amongst other things. This can further affect someone's finances, especially if they need to seek medical support and advice.
Debt is also known to create an element of uncertainty within the lives of those it affects. Concerns can arise about future financial stability, whether or not saving will be an option and how long it might actually be before the outstanding debt is re-paid. This type of worry and insecurity can increase stress levels further or implement them if they were not already present.
Add to the mix a loss of freedom, whereby a person will work hard to pay off their debts but then cannot afford to enjoy their free time and you have a recipe for disaster. However, all help is not lost! There are support options available to those who need them and whether it's through charitable assistance or via a fee charging debt Management Company, the options are by no means minimal.
Groups such as the National Federation for Credit Counselling can offer free up-to-date support to help you to help yourself in becoming debt free. Essentially they will give you the information, tools and knowledge that you will need in order to manage your debt and alter your spending habits. Similarly is the work of specific debt management companies who charge fees for their services.
Both free and fee charging services can help you to consolidate your debt without having to take out further credit, arrange for you to make one manageable monthly repayment and even look to freeze interest and charges on your accounts.