In a society that consistently ranks self-reliance as a core value, asking for help can be a real challenge—especially when it comes to a touchy subject like money. Part of debt denial is telling yourself that you can handle your debt on your own no matter what. And while it’s certainly possible to address debt as an individual, at some point it can be helpful to reach out and utilize available resources. In fact, seeking help with alleviating debt can be downright empowering if you approach it with the right attitude.
Take an Honest Look at Your Debt
At what point should you consider seeking help for your debt? While everyone’s financial situation is different, here are a few telltale signs that things may be spinning out of control:
- You routinely make minimum payments (or less) on your credit cards
- Your credit cards are maxed out, or close
- You have lost track of how much you owe
- You’ve had to transfer your balances to low-interest cards multiple times
- You depend on credit cards to obtain daily necessities
The first step is admitting to yourself that yes, you are in debt. Then it’s time to assess the situation in detail: How much debt are you carrying? How many credit cards do you have? How much have you paid toward each balance over time? Which creditors are sending you collection notices? How much of your income is currently going toward repaying debt?
Consider the Assistance Available
The next step is accepting that you may benefit from seeking help. There are a number of options to consider, including:
- Credit counseling: This process involves working with a counselor to establish a debt management plan and lower interest rates on your existing debt (if possible).
- Debt settlement: Debt settlement companies connect consumers with Certified Debt Consultants and negotiators, providing leverage to settle with creditors for an amount lower than you actually owe. Meanwhile, you make one payment per month into a bank account to build up a lump sum for the settlement.
- Cash-out refinancing: Working with a mortgage lender, homeowners can refinance their mortgage to come up with money to pay down their debts. This is advisable for high-interest debts only, as it does tack onto your mortgage debt.
- Declaring bankruptcy: Bankruptcy is a last resort measure because of the havoc it wreaks on consumers’ credit. People must also meet certain criteria to quality. Working with an attorney will help you navigate the process and understand whether you should file for Chapter 7 or Chapter 13.
Each method listed here has upsides and downsides, as well as qualifying conditions. It’s important to understand the consequences before making any decisions.
Finding the Right Solution
Before signing any paperwork or moving any money around, make sure you perform your due diligence. As the Federal Trade Commission advises, “Find out what services a business provides, how much it costs, and how long it may take to get the results they promised. Don’t rely on verbal promises. Get everything in writing and read your contracts carefully.”
The scientific concept of inertia tells us that objects in motion stay in motion. Likewise, objects at rest stay at rest. That is, unless a force intervenes. When you’re in debt, it’s much easier to keep going in a straight line without rocking the boat. However, this is how debt denial and shame build up over time. Seeking debt help can be empowering because it invites a force into the mix, giving you the confidence and motivation, you need to take action and break the cycle.