What to Do When Your Debt Is Too Much

by on June 5, 2014

Most people don’t plan on getting in debt, and nobody plans on getting in so much debt that they can no longer handle their payments.  However, life happens and between our bad choices, our rationalization of choosing debt, bad luck, and unforeseen circumstances, many of us find ourselves in more debt than we know what to do with.  If you’re in this situation or know someone that is, don’t panic.  It’s much better to take a methodical approach and find a long-term solution that can help.

For starters, expect to make some lifestyle changes.  The most important thing you can do is determine why you got into so much debt in the first place.  If it was because of something you couldn’t help, like a family emergency or health issue, then its an easy answer to find.  If, however, its because of your lifestyle, then its a much harder issue to correct.  Taking drastic steps to get out of debt is not going to help unless you can guarantee that its not going to happen again.

The first choice you should look for is a non-legal course of action.  Start by finding out if you make enough money to pay your minimum bills, or if you are past the point of being able to pay the minimums on your debt.  If you think you can still make ends meet, its time to make a budget and then make some lifestyle changes so that you can slowly get back on track.  Be patient and don’t give up on your goal.

If, on the other hand, you are so far in debt that you can’t even afford minimum payments, you should pursue a legal course of action.  Legal courses of action include such things as negotiating your debt.  This is something you can do yourself or hire someone to do for you.  Also, credit counselors are often available for free throughout your community or online that may be able to help you come up with a plan.  A more extreme case in the U.S. is to file bankruptcy.  Bankruptcy is a legal action that protects you from your creditors and uses the courts to legally absolve some or most of your debt.  Bankruptcy comes at a huge cost – your credit will be ruined for years – so only use if necessary.  In other countries, they have different ways of legally dealing with your debt.  For example, in Scotland, they use trust deeds as a government-backed, legal way to write off the debts that have become unaffordable.

Every country, state or region has their own way of dealing with high levels of debt.  Besides the strictly financial aspect, you should also consider the social aspect.  How will your peers, neighbors and colleagues view you if you use extreme measures?  You should have a good reason for taking any extreme action about your debt.  And more importantly, you should have a good plan that ensures you don’t find yourself in the same situation down the road.

{ 2 comments… read them below or add one }

E.C.V.H June 13, 2014 at 2:15 am

People really don’t like to create a situation of debt that they don’t have control over. However life makes circumstances and some people falls in huge debt. Therefore I believe here provided educative piece of suggestions really gonna help people who are under huge debt and would love to get rid of it. Thanks for great ideas.


Alan June 28, 2014 at 10:01 pm

Consumer Credit Counseling is a good option if you want to avoid bankruptcy and maintain a higher credit score. However, with a little work on your part you can do this on your own by simple cutting back and spending a little more towards your debts. Unfortunately this can be a 3 to 4 year process. It not surprising why so many people choose the bankruptcy route.


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