Recovering from Overwhelming Debt

July 17, 2012

By Gale Cunningham, National Foundation for Credit Counseling (NFCC), Inc., Vice President of Membership and Public Relations

Debt is definitely a four-letter word.  Don’t get me wrong.  I appreciate credit, but when the misuse of credit, or life for that matter, leads to overwhelming debt, it can consume you.  Debt concerns are with you 24/7.  You don’t sleep well.  You’re not a good employee.  And you’re not as good a parent or spouse as you’d like to be.

If overwhelming debt is ruining your life, do something about it.  That sounds like I’m stating the obvious, but in today’s economic environment, many people are financially frozen.  They don’t reach out for help because they’re convinced their situation is beyond help, they’re afraid that they might hook up with an unscrupulous company and end up worse off than when they began, or they’re simply tired of trying.  Don’t let this be you.  You owe it to yourself and your family to spend an hour with a trained and certified credit counselor, someone who sees people like you every day.  If there’s a way to dig out, they’ll find it.  And if not, they’ll provide you with the best resolution options available for your situation.

Each year the National Foundation for Credit Counseling awards one person or couple with their PACE Client of the Year honor.  For the last few years, each winner has paid off close to $100,000 in debt in less than five years.  (Watch their stories in their own words at http://www.nfcc.org/FirstStep/firststep_01.cfm) I mention this to encourage you.  If they can do it, you can, too.  Will it be easy?  Probably not.  Will it be worth it?  Definitely.

I realize that five years sounds like a long time.  What most people don’t understand is that paying off debt can take decades.  For instance, if you have $10,000 in debt with an APR of 18% and pay the minimum monthly payment of 2% of balance, even if you cut the card up and never add any more charges, it will take you 48 years to become debt free!  Further, you’ll have paid $36,825 for that $10,000 debt, with $26,825 going to interest payments.

Have I got your attention yet?  Now do you see why I said you should do something about your debt dilemma?  Forty-eight years or five years?  It’s your choice.  Here’s hoping you make the right one.

For more resources on debt and saving, check out these other resources:

Paying Down Debt

Ride Well Worth It

Positive Peer Pressure and the Envelopes in the Cupboard: Adolescents Now Prioritizing Saving

5 Signs You Are In Financial Trouble

Dig Yourself Out of Debt Action Plan

New Theme: Paying Off High-Cost Debt

Get out of Debt