Taking Responsibility is the First Step in Tackling Debt Problems
Eileen St. Pierre, The Everyday Financial Planner
Just when I think I’ve heard every story about how someone got into serious debt trouble, a new one comes along. We financial counselors can usually tell shortly after hearing the story if the client is serious about fixing the problem. If the client takes responsibility for the debt, even if the issues leading to it where not the client’s fault, then we have hope that we can help change the situation.
If you do have a debt problem, and are serious about fixing it, here are some things you can do to help out your financial counselor:
Don’t just show up for the meeting – Do some of the legwork beforehand.
Gather all your paperwork. Pull your credit reports at www.annualcreditreport.com. If you have debts in collection, call the lender or collection agency to get the current balance. Wait until you meet with your financial counselor, though, before negotiating any kind of reduced payment schedule because you will need to look over your budget to see what you can afford to pay.
Itemize all your expenses for the month. BE HONEST! If you spend $500 a month on cigarettes, write it down. Include past due amounts and late fees. We need to know exactly how much debt you have and how much money you have to budget. It is not our place to cast judgment so you need to trust us with the information.
Get your family on board with moral support.
You may have gotten into this mess, but your family needs to know that you will need their encouragement to get your finances in order. Don’t try to hide the problem from them. It won’t work.
- If you have kids, they need to understand there won’t be allowance money for them for a while. Can their sneakers last them a little longer?
- Your spouse or partner also needs to change his/her expectations about your time together. Date night now means frozen pizza and Netflix.
Keep a positive outlook.
Many people seek help for a debt problem when they are forced to –
- A service member who is in danger of losing his/her security clearance
- An employer finding out your wages are being garnished due to a court judgment
- Your electricity and phone are turned off due to lack of payment
You can’t change the past. You need to accept it and the promise of a better future. Wash your face, comb your hair, and get dressed. Go outside and take a deep breath of air. Once you do get back on track, imagine how great a role model you will be to others who face a similar situation!