Debt Stress * Settling Debt * Debt Consolidation * Relaxation * Stress * Cortisol * Feeling Guilty

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How to Handle the Stress of Being Overwhelmed with Debt

Part 6 in Our Debt Settlement Series

Last Updated: March 14, 2011

When Bad Things Happen to Good People

You are not a bad person if you are facing the fact that you can't pay your bills. Life happens. Even before the economic crisis of 2008 hit, circumstances often dealt fatal blows to a lots of people's finances. The three major causes of bankruptcy are still medical bills, divorce and loss of job. It's rare that I see someone who just recklessly spent all their money in anticipation of filing bankruptcy.

You're in Good Company

With so many people out of work, you are part of a large population of Americans who had to choose between starving their families and charging groceries on their credit cards. Try not to be so hard on yourself - after all, you are the only person judging you. No one else has to know, and if some one does find out and is judging you negatively, they probably don't know the whole story.

The Rules Regarding Financial Security Have Changed

Every financial expert in the U.S. proclaimed that having 6 month's of day-to-day expenses as savings in the bank would protect you from financial disaster. Unfortunately, people who followed this advice still had lots of trouble keeping their heads above water. The current 2008 recession kept many people from finding jobs for a year or more, draining all savings, including retirement funds. Going into debt was the only survival mechanism left.

Dealing With the Stress of Overwhelming Debt

It's easy to say and much tougher to do, but you need to stop worrying about the situation you are in. Worrying and ruminating will not help. Obsessing about your situation only adds a new problem to the serious ones you already face - stress and depression.

Prolonged stress and/or depression are known to cause and excess release of the hormone cortisol which can cause the following health problems:

• Impaired cognitive performance
• Suppressed thyroid function
• Blood sugar imbalances such as hyperglycemia
• Decreased bone density
• Decrease in muscle tissue
• Higher blood pressure
• Lowered immunity and inflammatory responses in the body, slowed wound healing, and other health consequences
• Increased abdominal fat, which is associated with a greater amount of health problems than fat deposited in other areas of the body. Some of the health problems associated with increased stomach fat are heart attacks, strokes, the development of metabolic syndrome, higher levels of "bad" cholesterol (LDL) and lower levels of "good" cholesterol (HDL), which can lead to other health problems!

Try relaxation techniques to help you deal with the stress you are facing. The Mayo Clinic recommends several relaxation techniques for dealing with stress:

• Yoga
• Tai chi
• Listening to music
• Exercise
• Meditation
• Hypnosis
• Massage

Dealing with Guilt

Many people feel guilty about "hurting" the credit card companies because they can not repay their credit card debt. Don't look at things this way. This is a business deal and there is no person being personally hurt here.

The reality is that credit card companies are making record profits. In addition, if you don't repay your debt, credit card companies are going to write it off as a business deduction.

As a matter of fact, the credit card companies, with their past unethical practices (there is not other way to categorize it) probably gave you a credit card you couldn't afford. This is why the Credit Card Accountability Responsibility And Disclosure Act was passed in 2009. While consumers are ultimately responsible for applying for and making purchases on credit cards, the credit card companies are somewhat at fault for their own losses should a person default on their debts.

Don't Let Your Emotions Fall Prey to Debt Consolidation Vultures

While there are still some good debt consolidation firms out there, highly questionable firms are still lurking about. Before you try a firm that charges any fees, you should try your local Consumer Credit Counseling Service (CCCS) office. Located in every major town and city in the U.S., they can help you deal with your credit card debt and come up with a debt settlement plan you can afford.

If you do decide to go with a commercial debt consolidation company, review our blog post on new rules regarding the debt consolidation company disclosure requirements. Once you receive information in the disclosure, don't sign the contract right away. Read the information carefully so you know what you are getting into.

Try Self Help Debt Settlement Techniques

You are really capable of negotiating your debts on your own. Numerous readers have told me of their success in dealing with credit card companies and even collection agencies. We offer a complete free debt settlement guide on this site. Even if you go with a local CCCS or a debt consolidation firm, it's worth a read so you know what is going on with your finances.

Considering Bankruptcy

Sometimes bankruptcy can seem like the only solution. Have you carefully considered all the alternatives? For example, borrowing from your 401K, selling some personal items, negotiating with creditors? We have a complete article on bankruptcy alternatives that you might want to read.

Sometimes, believe it or not, the best route is to just not pay your bills if you're not in a position negotiate your debt or file a bankruptcy. Many people are afraid of this option because they might be sued or just don't know what will happen. If you'd like to know exactly what will happen if you just stop paying your bills, you can read our article, "I'm in Credit Card Debt, I Can't Pay and Don't Qualify for Bankruptcy". This article tells you exactly what will happen and when. It's definitely worth a read.

If you've weighed all the options and decided to go the way of bankruptcy, read up on our article about doing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.

Bottom Line

Being in debt is highly stressful. Hopefully, this article gave you some tools to help you deal with it. Remember:

• You are not a bad person.
• Try not to worry. Use relaxation techniques.
• Don't feel guilty - the credit card companies share some of the responsibility.
• Don't do anything hasty and sign up with a debt consolidation firm without doing some research.
• Consider handling debt settlement on your own.
• Don't rush into bankruptcy without considering all the alternatives.

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Articles in Our Debt Settlement Series:

1. Understanding the Principals of Settling Debts
2. Negotiate Your Credit Rating
3. Paying Your Settlements
4. Actual Debt Negotiation Success Stories
5. What's the difference between debt negotiation and debt settlement?
6. Handling Debt Stress