Be Proactive in Dealing with Debt

People who have debts find it hard to sleep at night. The feelings of stress and guilt around being in debt have a massive psychological effect and interfering with your sleep can just be the starting point. Debt can have an indirect effect on your health and well-being and also cause problems in your relationship, quite apart from the practical realities of owing money.

Unless you take steps to deal with your debt, none of these symptoms are going to get any better, and of course, if you don’t start paying off your debts, the amount you owe will just increase through charges and increased interest on unpaid bills.

Although the amount of debt you have may feel insurmountable, there is always a way to work clear of debt. Different options will be open to you, depending on how much you owe and your personal circumstances.

If you are in a position where you earn more than you need to spend on the household every month, then you could work to a strict budget and use any excess income to gradually pay off the debts that you have. You can take steps to minimize your outgoings – such as getting the best deal on utilities that’s on the market, and by cutting your groceries bills – so that you gradually have more left over each month to pay off the debt.

Not everyone in debt will be able to work their way out of it by themselves. It may be that you can’t generate any leftover income, or can’t see how to do so. In this case, you may want to enter into a debt management plan with a debt management company or a financial charity that offers a similar service.

A debt management plan is a more structured way of paying off your debts. The debt management company helps you work out what you need for your household budget, then fixes an affordable monthly payment from you which is then redistributed amongst your creditors on your behalf. There’s a fee for the service, but the company should be able to negotiate interest rate and charges freezes with creditors on your behalf and it will take a lot of the stress out of the situation for you.

Whichever route you take towards being debt free, it’s bound to better than trying to avoid the issue. It’s not going to be an easy ride, but with perseverance, you’ll get there.

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8 Comments
  1. One of my favorite sayings when it comes to overcoming debt is “Your lack of action will hurt you more than your lack of resources”. And yes, having survived credit and financial hell, there were many sleepless nights. I’m built to deal with stress, but when you see your significant other tossing and turning over debt issues, that’s when it tears you up inside!

  2. We are definitely working on clearing our debt. We want peace of mind!

  3. I used a debt consolidation company when I was struggling with credit card debt, and they did a great job for me. They reduced my interest rates, and while my payment stayed about the same, they were able to get me on a 5-year payoff plan.

  4. I think that for most people, most of the time, a Debt Management Plan is best way to pay off unsecured debt, for lots of reasons. To save money and avoid being ripped off, visit the National Foundation for Credit Counseling website and find a nonprofit credit counseling agency near you. Or, many agencies do credit counseling by phone. A counseling appointment should be free (choose another agency if it isn’t), but you will pay a modest administration fee should you decide to sign up for a DMP.

    • Kurt, I believe that John’s point of being proactive is the most important without a doubt. However, when it comes to both debt and credit issues, no company or agency will do anything different for you that you can’t do for yourself.

      From both experience and interacting with many experts in the credit and debt fields, do-it-yourself should always be your first option in addressing credit and debt issues. However, there is a place for both Credit Counseling and Debt Settlement to help consumers as well.

      You just need to know whom to trust and use and contacting NFCC is a great first step as you have advised in your post.

  5. Proactive definitely helps. But discipline and determination is essential with dealing with debt. Then we can talk about a good night sleep! :)

  6. I found that when my husband and I got serious about tackling our debts, we were able to minimize them far quicker than either one of us would have predicted. Just shows what focus can do!

  7. I’m a firm believer in being debt free. I’m a full time accountant and a tax and credit consultant and have seen so many young couples with many credit cards maxed out to the tune of 50,000 to 75,000. I’ve seen marriages go on the rocks because of the stress with debt. So many individuals feel that they have to have all the nice things all at once because their friends do. Both spouses have to bite the bullet and work together in reducing and eliminating debt. Good site and information that more individuals should be following.

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