It’s an all-too-common problem. People take out loans to pay for essential but expensive things, or rack up credit card bills they were almost unaware of and before they know it, they’re in debt that seems unsolvable.
It may be the worst feeling in the world, but you aren’t alone if you’re one of those people.
Although it’s easy to spiral and think there’s no point in trying to solve such a massive problem, breaking it down and working out a solid strategy can see you through to the light at the end of the tunnel.
If you’ve found yourself saying, “I’m drowning in debt”, it’s time to swim.
“I’m Drowning in Debt”: How to Get Hold Of It
Take a deep breath. Although it’s easy to spiral into despair, all hope is not lost if you’re in debt.
There are a number of things you can do.
The most important thing is to figure out a realistic plan to pay the debt off. Reach out the companies and discuss how much the amounts are, and if there’s any chance of lowering them — if the debt has been passed to a credit agency, they often will.
When figuring out your loan repayment strategy, it’s essential that you remember interest, as this can add up over time.
You should consider paying off large amounts with smaller loans, such as payday loans, and it might just reduce your total interest. These loans are often even available to federal benefit recipients, and it can end up being a solid repayment strategy.
It’s important to research the best options for you.
Strategies to Avoid
If possible, avoid paying only the minimum amount. This gives the interest time to accumulate and you’ll end up paying more in the long-run.
Although you might feel embarrassment or simply don’t want to get into a conflict, it’s also important to communicate with those you owe debt to. They might be able to help you pay off loans more than you were expecting, so avoiding their calls and mail is not the way to go — comforting as it may seem at the time.
Some people end up tapping into their retirement to pay off debt. It’s another strategy that can seem sorely tempting, but almost every other option should be exhausted first. You will eventually need that money.
If All Else Fails, Declare Bankruptcy
If all else fails, this is an option.
Your credit record will be damaged for ten years but if there’s truly no other choice, you can file for bankruptcy. You will no longer need to worry about the debt, though there will be many other adverse effects.
You Can Escape This
For most people, acknowledging, “I’m drowning in debt” feels like a hole they’re never getting out of. It’s important to remember that many people have felt like this, and most of them see the other side.
By communicating with those you owe a debt to and figuring out a solid strategy, you can reclaim a healthy financial life.
For other life and financial tips, check out the rest of our blog. Visit the Finance section of the Everything Entrepreneur Blog right now to learn more about ditching debt.