Overwhelming debt can lead to stress and depression and has been linked to rising suicide rates. Money problems have also been linked to relationship instability, so your sense of physical and emotional security may be at risk when debt is a constant presence in your life. The following are ways that financial health can affect a person's mental health. Sometimes, overwhelming debts are accompanied by devastating speed, a health crisis, unemployment, or a natural disaster.
Or maybe it came little by little, and now creditors and collection agencies are pressuring you to pay, and you just can't. To help you make that decision, let's first look at the big picture of your debt. List all your debts on the Debt Reduction Plan form that you can download below. Take note of low balance amounts or balances with high APR.
Decide which balance makes the most sense to settle first. Then, start paying everything you can to pay off that balance. Select a debt that you think you can pay off in a short time and then move on to paying another one. Which creditors are being paid to and how much; if your debt is in collection, make sure you understand who owns the debt so that the payments go to the right agency.
The NFCC is a national nonprofit organization whose mission is to instill positive financial behavior in consumers and help them control their debt. And if you find yourself in a financial hole due to debt, the only real solution is to change your borrowing habits and start looking for a way out, step by step. Debt settlement companies generally ask you to stop paying your creditors and instead place the money in an account they control. Add to that an increase in rent, groceries, and necessities, along with stagnating or declining household incomes, and debt seems inevitable.
To get rid of debt, you must first be aware of how much you actually have, said Michael Gerstman, ChFC, CLU, CEO of Dallas-based retirement planning firm Gerstman Financial Group. If you have used a co-signer, your bankruptcy filing will make that co-signer solely responsible for the debt. Seeking help is the easiest way to start taking steps to overcome mental health and debt challenges. Debt relief could involve eliminating debt altogether in the event of bankruptcy; obtaining changes in your interest rate or payment schedule to reduce your payments; or persuading creditors to accept less than the total amount owed.
For some, being buried in debt and having to dig their way out is enough to pay them off, accumulating more debts in the future. Once you've made a list of how much money you owe and to whom you owe it, you can begin to determine what debt is most important to pay first. The snowball approach allows you to address the lower amount of debt first, repay it, and then tackle the next loan. Once you have a clear idea of how much you are spending and have taken steps to reduce this amount, you can see how much money you have left each month to spend repaying the debt.
Families suffering from debt, whether personal debt or student loan debt, cannot invest as much money in retirement as they would like and experience a delay in traditional milestones, such as starting a family and buying a home. Although debt may seem imminent, help is available to cope with financial stress and find ways to better manage money.