Friday, June 21, 2024

What to Do When Your Debts Feel Insurmountable

Most of us have at least some debts, even if it’s good debt, like debt from a mortgage on a primary residence. In small amounts, it’s completely manageable. But sometimes, debt can spiral out of control, placing you at the mercy of sometimes aggressive debt collectors.

What can you do to get out of this seemingly hopeless situation?

Understand There Is a Path Forward

First, you should understand that there’s a path forward for you. Debt doesn’t have to control your life, and no matter how much debt you have, there are options available to help you deal with it. We’ll explore some of these options in the sections that follow.

Deal With Debt Collectors

If you’re currently dealing with rude and excessively persistent debt collectors, the first step is to address them. There are laws in place to prevent debt collection harassment, and you have a right to request an end to the harassment. In some cases, you can stop this rude and aggressive behavior with a simple written request – but unfortunately, not all cases are this easy to solve.

With the help of a consumer protection attorney, you can stop those aggressive debt collectors once and for all. Your lawyer will help you understand your legal rights, the nature of your harassment, and whether it makes sense to move forward with further legal action. The initial consultation will likely be free, so there’s no harm in starting the conversation.

Evaluate Your Debts

Next, take inventory of all your debts and evaluate your financial standing.

Especially close attention to:

  •       Amounts. How much do you owe and who do you owe? Once you have the total figure for all your debts, you can start making a plan to pay it down.
  •       Types. Different types of debt are treated differently. Some types of debt, such as mortgages, are considered good debts. Some types of debt, like student loans, are not dischargeable in bankruptcy. Even if you don’t understand all the nuances, you should have a general idea of the different types of debts you owe.
  •       Interest rates. You should also pay attention to interest rates. Higher interest rates force you to accumulate debt faster, so loans with higher interest rates should be higher priorities for payoff.

Consider Bankruptcy

If your debt is truly insurmountable and you don’t see any way out, you may consider bankruptcy as an option. People often think of bankruptcy as a scary financial last resort, and it’s true that it does carry some important consequences for your credit.

However, there are many different types of bankruptcy – and none of them are a financial death sentence. Some types of bankruptcy merely reorganize your debt so you can pay it off more easily, and all types of bankruptcy disappear from your credit report eventually, even if it takes many years.


For some people, the best move is debt consolidation. This essentially means paying off your existing debts by taking on new debts that are more favorable. For example, you can pay off a variety of different debts with high interest rates and replace them with a single debt that features a low interest rate.

Create a Strict Budget

Next, create a strict budget so you can start living below your means. You need to be in a position where you make more money than you spend.

These are some of the easiest areas to cut:

  •       Entertainment. Cut back on your entertainment expenses. End all subscriptions that you don’t truly need, don’t buy tickets to special events, and cut back on any expensive hobbies that you have.
  •       Eating out. Instead of eating out, cook your own meals. If you don’t know how to cook, now is the time to learn.
  •       Transportation. Public transportation and biking can help you cut back on transportation costs.
  •       Housing. Though it’s not always easy to move, downsizing your home can help you save hundreds of dollars every month.

Save an Emergency Fund

With your initial savings, build up an emergency fund that you can use as a cushion to avoid taking on new debt. Ideally, you should have at least a few months of expenses saved up.

Start Chipping Away

Once you have a few extra bucks at the end of each month and an emergency fund cushion to get you through tough situations, you can start chipping away at your debts. Use the extra money to start paying off your highest-interest debts.

Increase Your Income

If you want to accelerate your debt payments, consider finding a way to increase your income. That could mean taking on another job, picking up a side gig, or focusing on getting a promotion or a raise. Every little bit counts, so if you can increase your monthly debt payments even slightly, you’ll pay off your debts significantly faster.

Once you get in the groove of chipping away at your debts, you should be able to calculate how long it will take you to pay off your debts in full. Depending on the extent of your debts and how much you’re able to save every month, this project might take you several months, several years, or even longer. The important thing to remember is that progress is progress, and every step forward brings you closer to a bright financial future.

Lindsey Ertz
Lindsey Ertz
Lindsey, a curious soul from NY, is a technical, business writer, and journalist. Her passion lies in crafting well-researched, data-driven content that delivers authentic information to global audiences, fostering curiosity and inspiration.

Related Articles