You are not a bad person if you are facing the sobering fact that you can’t pay your bills. Life happens. It’s a common tale these days to hear people talk about the tough times they’ve faced during the recent recession. However, financial crises can occur just about any time. The three major causes of bankruptcy are still medical bills, divorce, and loss of job. It’s rare you hear about someone who refuses to pay bills “just because.”
You Are Not Alone
With so many people out of work, a large population of Americans has 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 the circumstances you are facing, and if someone does find out and is judging you negatively, they probably don’t know the whole story.
The Rules Regarding Financial Security Have Changed
Before the crisis, every financial expert in the U.S. proclaimed that having 6 months 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 after finding themselves out of work for a year or more. As of February 2015, the average duration of unemployment hit 37.1 weeks. Going into debt can be seen as 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 over 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 an 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.
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.
