Many factors can cause one to fall into debt. One thing for sure, being in debt is absolutely no fun, especially when you can no longer seem to pay what you owe. In the old days, the debtor could actually become indentured to the creditor and spend the rest of their life working for the creditor in order to pay the debt.
Today, we may not become indentured servants, but the Bible still says that the debtor is servant to the lender. It sure feels like being in servitude or sometimes like being in prison to be in debt. More and more Americans find themselves falling deeper in debt and it is time we all learned how to get out of debt and avoid falling back into that trap.
When I began battling Post-Polio Syndrome (PPS), I initially incurred a mountain of medical bills that with a set income, I did not have a budget for paying them. Then, with the effects of PPS worsening, I soon found my ability to earn income affected and my overall income actually fell to half what I had been earning previously. I found myself "in debt."
Often when one falls into debt, they begin to blame themselves and feel as if it has never happened to anyone else before. Soon, self-esteem plummets and depression that paralyzes sets in. When this occurs, a person can find themselves not doing anything necessary to change their situation, only attempting to run from it. You can ignore debts and even attempt to run from them, but they will not simply "go away." Positive steps must be taken to begin to climb out of the debt pit in which you have fallen.
Step number one is to acknowledge that you have a problem and that something must be done to resolve it. You cannot afford to ignore it because things will compound and spiral totally out of control. When you are having debt difficulties and you begin to have overdraft charges, late charges, and even disconnect fees, what little you may have had to pay on your debts will soon be consumed. That is why you must early on acknowledge your situation and begin to map a strategy for resolving it.
Step two is to sit down and accurately list all of your debts -- the monthly payment and the total owed. Don't leave out anything. Make sure you have listed everything so that there will be no surprises later on. Now, list all sources of income and again be extremely accurate. Be sure to list "take home" pay and not gross.
If you are in a situation where your income is insufficient to pay all of the monthly bills that you have, you must now decide what is essential to be paid. Examples are "secured debt", food, utilities and fuel. These are things you will have to find a way to pay even if some other debts go unpaid for a while.
Once you have identified your essentials, then budget your existing income to insure you can pay each of those first. Next, you have to work on a system for eliminating the other outstanding debts with money that comes outside the budget. This can be the proceeds from garage sales and the sale of other non-essential assets you may posess. As you sell things, try to accumulate some funds before you just begin randomly paying your outstanding debts.
After accumulating a significant sum of money, you should first approach your creditors with an offer to settle your debt for less than owed. Many times, creditors are more than happy to reduce your debt when they see that you are making a good faith effort to pay. You may be able to settle in some cases, paying 40-50% of the amount.
Finally, after selling everything you can, and maintaining the minimal budget that you have set up, you need to look at increasing income. Even if you are suffering physically and are unable to work at a normal job, there are multiple ways to develop income and the best kind is residual income. That is income that is not based on what you do today, but what you did previously. You do it once and the income keeps coming and coming. For people who have become disabled, the internet is a tremendous source of residual income -- if you know how to do it. It can also be a source for those who are still working outside the home as it can become a secondary source of income.
The depression and paralysis that come from being deeply and seemingly hopelessly in debt will break when you begin to take positive action to get out of debt. And, can I encourage you, once you get out, find a way to get on a cash basis and do not allow yourself to get in that position again.
I have found an excellent website for "debt elimination" and "credit repair." This is a proven company that will not take you for another ride down the river, but will actually work with you to accomplish what we have talked about in this article. Check it out at:
http://gmadden.BetterCreditPro.com
Elsewhere on this site, you will find many opportunities to increase your income. Do it today.
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