If you have been caught in a cycle of debt that is causing you stress and anxiety, you need to come up with an effective debt management strategy.

Latest figures in the USA suggest that personal debt continues to rise. In the last quarter of 2019, that figure increased by over $190 billion. This is not an isolated phenomenon with many countries registering increasing household debts from student finance, personal loans and mortgages.

These trends are worrying because debt that spirals out of control can have significant effects on the wellbeing of those in debt. But there are things that can be done to turn the situation around.

First, What Really Is Debt?

Debt usually comes with some type of negative connotation. It is simply when money is owed by one party to another, most often owed to banks or loan companies. People speak of debt as something that must be avoided at all costs such as payday loan alternative. However, sometimes having debt can be good for your credit score – if you always keep up with repayments.

When Is Debt Not a Good Thing?

However, debt is not a good thing to have if you are struggling to make repayments. Maybe you were making repayments comfortably but lost a stream of income or had to pay off an unexpected expense, such as replacing a car to get to work. There are hundreds of reasons why people’s once manageable debts suddenly become unmanageable.

When you are struggling to live your usual life and make debt repayments – with no immediate solution in sight – debt has gotten out of control. Debt is also out of control if it is affecting your wellbeing. It may be causing you to feel anxious or stressed, or even damage your relationships.

What to Do if Your Debt Has Escalated

If you are in a situation where your debt has escalated and you have entered into a spiral of increasing debt, there are things you can do:

  • Speak with your creditors to see if they can help
  • Speak with debt management charities for advice and support, such as Step Change in the UK.
  • Speak with a debt counsellor who will approach your creditors for you
  • Be honest with loved ones to relieve stress and pressure
  • Make a plan to manage your debt, such as debt consolidation and a student loan payoff calculator to know when you will be finish with your payments, or use the snowballing method discussed by Wonga.

Being trapped in a spiral of debt can be a worrying time and damaging to your mental health. The important thing to hold on to during this time is to remember that thousands of people have also been in your shoes and managed to correct their personal finances through research, seeking support and taking action.