Why Dealing with Debt Isn’t as Scary as You Think

It’s no secret that unpaid debt can be stressful, embarrassing, and scary. People are often ashamed to talk about their financial troubles, especially if they’re dealing with unpaid credit card bills or missed mortgage payments. Left unattended for too long, the total amount of debt can reach an unpayable level—leaving people looking for debt relief. 

If you have unpaid debts, even if you have missed payments on your bills, you don’t have to be afraid. 

Dealing with debt by facing it head-on and taking proactive steps forward can help you get better results for your personal finances. 

Addressing your debt doesn’t have to be so scary. Let’s explore how you could find relief by tackling your debts as soon as possible. 

3 Reasons Dealing with Debt Is Not that Scary

At first, debt may seem frightening to even think about. It doesn’t feel good to get notices in the mail from your credit card company or watch the balances grow each month as bills go unpaid. Some people might be tempted to ignore the problem. 

When you take the time to really think about it, you may realize that dealing with debt isn’t so bad. Here are a few reasons.

1. Dealing with debt is nothing to be ashamed of

Debt is as American as apple pie. Americans have lots of debt. It’s likely that many of your friends, family, and neighbors are dealing with debt, just like you. Americans carry debt from mortgages, auto loans, credit cards, student loans, and more. 

Back in the 19th century, when there were debtors’ prisons, being in debt was seen as a morally bad thing that people should be ashamed of. Not anymore. Most Americans today understand that debt isn't good or bad 

Debt is just a financial tool. And debt powers the economy. 

Getting into trouble with debt isn’t bad, either. People often find themselves in financial difficulty for reasons beyond their control. Unpaid debts can result from job loss, divorce, loss of a breadwinner, medical bills, or many other unfortunate circumstances that could happen to anyone.

Instead of feeling ashamed about your debt, put that energy into taking positive steps forward. Stop beating yourself up, and start beating your debt. 

2. Anyone can tackle debt

You don’t have to earn a lot of money or even be good at math to set up a plan for dealing with debt. The most important ingredients are commitment and hard work. A solid strategy for dealing with debt might involve earning a little more, spending a little less, or getting professional help. Begin by setting up a budget to figure out where your money really goes each month, and then take it from there.

3. It’s easier to get started than you think

No matter how much debt you have or where you are in life, you can work toward becoming debt-free by just taking it one step at a time. Here’s a quick step-by-step guide for dealing with debt: 

• Look at the big picture. How much unpaid debt do you have, and how much is it costing you per month? 

• Follow an example. Do you know anyone, or have you read about someone in the news or on social media who has paid off debt successfully? What did they do? Can you follow their example? 

• Find the low-hanging fruit. What’s the smallest debt that you could pay off fastest? Sometimes it helps to build momentum by paying off that smallest debt first. 

• Identify your biggest roadblocks. What’s holding you back from paying off debt? Do you feel overwhelmed, not sure where to start? 

• Lay out a phased plan. Use a debt payoff calculator or other tools to understand how long it would take to pay off the debt. 

• Set expectations. What big changes are you prepared to make to pay off debt? Are you willing to cook all your meals at home for a month? Give up vacations for a year? Sell your car and get a cheaper one? Take in a roommate to save money on rent? Think carefully about what you’re willing to give up today in your lifestyle in exchange for a more prosperous, peaceful financial future. 

• Get going. Now it’s time to take action and start dealing with debt. 

In the next section, we’ll share a list of tools and resources for dealing with debt. See which ones might be good choices to help you find debt relief. 

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Tools For Dealing with Debt

There’s no one right answer for dealing with debt. Different people might have success with any or all of these choices listed below. As you start your journey of dealing with debt, learn about these common debt relief solutions. Learn how they work, why people sometimes fail to get results, and what you need to know to start. 

DIY debt strategies

Just like fixing up your home, dealing with debt is about repairing the foundation of your everyday financial life. If you consider yourself a DIY-er, you may want to try one of these solutions. 

DIY debt relief doesn’t require a new credit card,  new loan, or professional help. You just have to find extra cash and put that money toward your debts.

Here are the two most common DIY strategies for dealing with debt: 

• Debt snowball. With the debt snowball method, you pay off your smallest debts first, while making minimum payments on all the others. This gets you to your first debt payoff the fastest. When the first debt is paid off, put its payment toward the second debt (in addition to that minimum payment you were already making). In this way, your payment amount grows bigger, like a snowball rolling downhill. 

• Debt avalanche. This strategy works like the snowball, but you focus on the debt that has the highest APR. This could save you money in the long run. But if your most expensive debt is big, it could take a long time before you get your first win.  

Debt consolidation loans for dealing with debt

A debt consolidation loan lets you roll multiple debts into one. This way, you won’t have to keep track of multiple payments and worry about whether you’ve made all of them on time. Debt consolidation loans are best when you can qualify for an interest rate that’s lower than what you currently pay.  

This type of debt solution is often a good choice if you’re dealing with expensive credit card debt and you can qualify for a personal loan or other type of loan. 

Balance transfer cards for dealing with debt

A balance transfer card is another way to consolidate your credit card debt into a single credit card with a promotional interest rate as low as 0%. The way it works is, you transfer an existing credit card balance to the new card for a fee (generally 3% to 5% of the amount you’re transferring). 

Balance transfers work great if you can pay off the balance by the time the introductory rate ends (typically 6 to 21 months). Paying off credit card debt at zero interest for a year (or longer) could give you a powerful tool in your plan for dealing with debt. 

But there are some possible downsides to a balance transfer credit card. First, you need good credit to qualify. If you’re already falling behind on your credit card bills or have delinquent accounts on your credit report, you might not be approved.

Also, a common pitfall is to charge up new balances on the paid-off cards after transferring the balances. Doing this could leave you in even more debt than you started with. 

Balance transfers are a bit of a juggling act. If you have a plan that lets you save some money while you knock out your debt in a relatively short time, and you’re not at risk of running up new debt, it could work. 

Credit counseling

When you work with a credit counseling agency, they might recommend a debt management plan (DMP) for you. A credit counselor will set up a structured repayment plan for you. They may also be able to negotiate with your creditors to lower your interest rates. 

The idea is to fully repay your unsecured debts in three to six years. You’ll send monthly payments to the agency so they can distribute your funds to your creditors until you’ve paid off all your debt.

You’ll probably have to stop using credit cards while you’re in the plan. 

A DMP and credit counseling could be a good choice for some people. But the payment amount tends to be high. If you can’t make your financial life fit the rules of the DMP, your creditors could back out of the plan.  

Debt relief

Debt relief or debt settlement is negotiating with your creditors to accept less than the full amount you owe, and forgive the rest. You can negotiate debts yourself or work with a professional debt relief company like Freedom Debt Relief. Professional might get you better results than you could get for yourself. They have negotiating experience and relationships with most creditors.  

Turn to FDR to Deal With Debt Relief

If you’re dealing with debt and it’s making you stressed, scared, or affecting your ability to pay for the things you need, a debt relief program may be a good option for you. To learn more, talk to a Freedom Debt Relief Certified Debt Consultant. They’ll help you find out if you qualify or provide information on other options you can use to resolve debt and build a stronger financial future. Contact us today.