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What to Do When Your Debt Is Overwhelming Your Life

posted by Chris Valentine

It’s there when you think about getting a coffee on the way to work or a sandwich for lunch, when your gas tank lands on E or when you need extensive dental work done. Your debt creeps into every financial moment in your life, and you’re exhausted.

Here’s what to do when your debt is overwhelming your life and you need a way out.

Does Your Situation Require Soft or Hard Fixes? 

Attitude adjustments and lifestyle changes are usually the first pieces of advice in many debt relief articles, but not every debtor’s situation can be saved by positive thinking and budgets. Decide whether your financial predicament calls for soft or hard fixes.

Soft fixes are things like adopting a positive attitude, seeking support through a group like Debtors Anonymous, surrounding yourself with more financially responsible people, and yes, developing—and sticking—to a budget.

Hard fixes on the other hand, are specific strategies and actions that provide a fresh start, albeit, a bruised fresh start. These are things like debt settlement and personal bankruptcy.

Working with a debt settlement provider requires you to stop making your payments while they negotiate with your creditors in hopes of agreeing on a lump sum payment. The strategy can be successful since creditors would prefer some money over nothing, like they’d get if you declared chapter 7 bankruptcy, which forgives your debt in exchange for all your assets and a nice 10-year scar on your credit report.

Making an Informed Decision to Get Out of Debt

If you’re in the soft fix category, you have all the tools you need to be successful. If you fall into a hard fix, buckle up and start researching debt relief providers and the bankruptcy process. Both options will cost you money; debt relief providers charge a fee based on the amount of debt they’re able to settle (assuming you agree to pay it) and bankruptcy carries filing fees, financial management courses and attorney costs.

Whichever route you choose, you’ll want to make sure you get the best help possible. While choosing a bankruptcy lawyer will be fairly straightforward, finding a suitable debt settlement company can be a little more confusing. This is because of the mixed reviews about the industry’s legitimacy, which has been tarnished over the years by scam companies duping desperate debtors into paying upfront fees for debt that’ll never get settled.

A quick way to check a company’s legitimacy is to look at their track record for settling debts over the years. For example, searching for Freedom Debt Relief reviews on the BBB, Consumer Affairs and other review sites will populate thousands of reviews from debtors detailing their debt settlement experience. Also be sure to speak to each company’s representatives by phone to fill in any research gaps. Pay attention to how the company positions debt settlement, their patience in educating you about the process, as well as how transparent they are about credit score damage, fees and the amount of time you can expect the settlement process to take.

Any company that offers too-good-to-be-true answers is one you shouldn’t trust. Debt relief can be an effective option for severe situations, but it has its consequences and should never feel like a safe, convenient decision.

In many cases, living with debt is unavoidable, but living with unsecured debt that continues to grow and affect your mental health while providing no tangible use in your everyday life like a home or car? Well, that’s just not right. Whether you fall in the soft or hard fix bucket, get committed to forging a new path toward financial calm today.

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