A Contract is a Contract!

What does it really mean when you sign on the dotted line? Whether it is a monthly membership to a health club or the signature on a mortgage, it means obligation. So what happens when you walk away from a contract?

There is a tendency to think “Oh, it is just a lease” or “This is just a gym membership” or even “I can just give this car back and the problem will go away.” Anytime you sign your name on the dotted line, you are obligated to pay a certain amount of money for a certain of time. Any attempts to get out of that will result in big problems. The bottom line is that the company that has your signature - your promise to pay.

Here are some things to consider:

1) Be realistic and know that you have to pay – there is no way out of a contract unless the company wants to give you a free pass.
2) Don’t make assumptions. Assumptions are our way of rationalizing away reality. Just because you voluntarily give a car back doesn’t mean that you are going to get out of it.
3) If you can legitimately get out of a contract, document it. Oral agreements don’t work. Get everything in writing.
4) Make sure that you have a good system in place where no mistakes can happen – those payments need to be made like clockwork.

It is so important to have a good system in place. One mistake or false assumption will potentially ruin your credit and send you to a debt collector.