Is The Debt Spiral Inescapable?

Debt doesn’t always have to be the worst possible thing. Most people maintain some level of debt that allows them to build a credit history for future major loans, as well as to help them manage larger expenses.

However, debt can sometimes grow out of control and, when that happens, it can become a major risk to your financial health. However, it’s important to recognize that we do have some power to take measures even when it goes out of control.

Is The Debt Spiral Inescapable?

Don’t leave your credits in the dark

A very common mistake that people will make when they fall into debt is that they will try to keep it to themselves for far too long.

If your creditors see that you’re falling behind on your payments and you fail to get in touch with them, they can assume that you’re trying to avoid that debt, and begin the collections process.

You have a lot more wiggle room for negotiation when you’re dealing directly with creditors rather than deal ng with collections agencies. You may, for instance, be able to make an agreement on changing the payment period for large debts, settling a reduced bill, or freezing interest rates.

Moving your debt around

If you’re not in a position to negotiate with your creditors, such as not having cash reserves available to pay a reduced bill, then you might need to look into changing who you’re paying and what the terms are through things like

Effectively, what debt consolidation means is that you move all of your existing, disparate debts to one new creditor.

Moving it to one creditor can help you reduce high-interest loans, offer you some more time to pay, and it can prevent the stress of dealing with multiple creditors.

Getting your debt eliminated

Aside from having your debt rearranged and reorganized to make it easier to pay it off, it may also be possible to have your debt discharged entirely.

To a lot of people, bankruptcy might seem like the only option when it comes to discharging most kinds of debt (with student debt usually excluded from this method.)

However, programs like may be able to help you be discharged from unfairly applied debts. It’s not as widely as available as restructuring or consolidation, but it’s an option worth looking into, at least.

Know how to safeguard your money in future

The best way to get out of debt is to have some measures prepared ahead of time. 

For instance, we mentioned how you can negotiate with creditors to pay off your debt if you’re able to pay a reduced lump sum.

However, it’s understandable that many do not have that option available. That’s why you should start to work towards it not by finding the best possible savings options for whatever cash you can put aside to act as an emergency fund.

Aside from getting out of debt, it is vital that we learn from the experience and make sure we manage our money as carefully as to make sure it doesn’t happen again.