Are You In a Debt Spiral?

by Gary Foreman

Are you in debt? And not doing anything about it? Here’s a look at the downward spiral you could experience if you choose to ignore your debt problem.

So you’ve decided that now is not the time to deal with your debts. You probably have a good reason. But before you click away and put it off to some other time, you might want to get a look at your future. To be sure, not everyone experiences these specific events. But it’s remarkable how similar the path is for those who end up in a debt spiral.

We’ve seen this pattern repeated many, many times. Your experience might be a little different. But, if you’re counting on that, the odds are against you. Some experience these events quickly. For others it’s a slower progression that takes most of their lives.

We hope that it doesn’t happen to you. But we felt we owed you a glimpse of what we’ve seen hundreds of times so you’d be able to make an informed decision about whether to take action against your debt.

How it begins

It starts when you don’t pay your entire credit card bill each month.

Your credit card debt creeps a little higher each month and your credit score begins to fall.

Any thought of paying off your whole credit card balance at one time disappears. The question now is how much the balance will grow each month.

Your take home pay is no longer enough to cover your bills.

You stop contributing to your 401k or other retirement plan to free up extra cash.

You begin fighting with your mate over money.

Where it can take you

You may take a cash advance from one credit card to pay another bill. The cash advance is expensive, but the only way you can avoid being late with the minimum payment.

You may apply for another credit card thinking that you can use it to pay off your other cards. You’re offered a high rate card or turned down and not offered a card.

One or more of your credit cards companies may raise the interest rate on new purchases. That means that less of each check you write to them pays for your purchases and more goes to pay interest.

You soon may find it impossible to pay all of your bills on time. At the end of each month you’ll have to figure out which bill should be a little late.

Money fights with your mate could become a regular event.

You’ll need to remember which bill was late last month so a different one will be late this month.

Your credit score will continue to fall and could drop below 630.

You may try to get another credit card but will be refused.

One of your debts could go to a debt collector and you may start getting annoying calls at work and late at night.

You may begin to wonder if you could lose your car to repossession. Or if you could be evicted or foreclosed.

You might consider borrowing from family and friends. Whether they say ‘yes’ or ‘no’ your relationship with them will be hurt.

You could receive a notice that your electric and/or water will be turned off if you don’t catch up.

You’ll likely begin to have trouble sleeping.

Money fights with your mate could become serious. You or your spouse could begin to consider divorce.

You’ll likely approach the credit limit on one or more of your credit cards.

Your car could break down, or your refrigerator, and you’ll have no way to pay to have it fixed since your cards are maxed out.

Where you’ll likely end up

You’ll begin to think about declaring bankruptcy.

You’ll recognize that your situation is hopeless.

You will finally realize that you can’t solve your debt problem yourself and will call in professional help.

How to get out

If you’re on this path you have a lot of company. About 1 in 3 Americans have at least one bill in debt collection.

You also have a choice. You can wait until the pain gets worse or you can get out of the debt spiral today.

We’ll show you how.

It will take a little courage on your part. But the sooner you address the problem, the easier it will be to solve it.

It’s up to you. You can choose to ignore the problem until all your options and many of your possessions are taken from you. Or you can begin to take action while you still have choices. Why not get help now?

• Debt Warning Signs You Shouldn’t Ignore
• Do You Have a Relationship With Debt?
• What Does My Debt Cost Me?

Reviewed April 2021

About the Author

Gary Foreman is the former owner and editor of The Dollar Stretcher. He's the author of How to Conquer Debt No Matter How Much You Have and has been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com.