The True Cost of Debt

Debt hurts.  It hurts your pocket book.  It hurts your relationships.  It hurts your mental well being. It hurts your confidence.  The price you pay for your debt is not only that monthly minimum payment on your credit card or the giant mortgage payment; the true price is often paid in the collateral areas of your life.

In my bankruptcy/consumer law practice I see the negative impact debt has on family relationships.  After bankruptcy consultations with married couples it is not uncommon for one spouse to start blaming the other for their financial problems – right there in my office!  I know that if they are willing to attack each other at my office in front of me, a total stranger, there must be some real knock-down, drag-out arguments at home.

An old football coach of mine used to say that pain makes cowards out of us all.  When when we were tired and worn out, or hurting during a game, that is when we really had to decide how we were going to respond.  I remember playing in the 1998 WAC Championship game in Las Vegas against Air Force.  You college football fans know that Air Force runs an offense that is a little unique in order to adapt to the smaller players they have (there are height and weight restrictions to get into the Air Force).  We at BYU decided we would take a play out of their page book and run a no-huddle offense.  This meant that there would be little rest in between each play.

For an offensive lineman like myself those breaks in between each play were vital!  Midway through that game I found myself sucking wind so hard I thought I was going to pass out – and this was at the end of the season when I was in good shape.  I actually remember going through the debate in my mind as to how I would continue.  Physically I was totally exhausted.  But even then I was able to mentally make the decision (whether I wanted to or not) that I would continue and focus on doing my job.

So it is with your battle with debt.  Most of the people who read my articles or listen to my podcast are well beyond a missed credit card payment or a few collection calls.  Most are dealing with the stress of a debt collection lawsuit, a wage garnishment, and even bankruptcy.  All of these can induce life changing stress.  Debt makes cowards out of us all.  We just need to decide how we are going to respond.

What You Can Do About Your Debt Problem Today

One of the biggest casualties of going through the debt collection process is loss of control.  If you are being garnished you have lost control of your bank accounts or your paycheck.  If you are being sued by a debt buyer like Midland Funding you may feel that you are not in control of the process (and if you are representing yourself, often you aren’t in control, the debt buyer is).  The loss of control is what leads to the stress.  It is what leads to the loss in confidence and self doubt.  The first thing you need to do today is gain back a portion of that control.  Here’s how…

Understand the Process

Eliminate some of the uncertainty in your life.  If you are in a lawsuit, do some research and find out what the process is like in your state.  In this computer age every state is going to have information on the legal process in your state.  So what should Google?  Start off with the name of the court where you have been sued.  Many courts have self help services or a link to forms and the legal procedures on their websites.  They may even reference the Rules of Civil Procedure in your state.  Google them.  Look at Rule 4 (service of the lawsuit), Rule 12 (the Answer to the lawsuit), Rule 26 (governs disclosure of documents), Rule 56 (if they file a motion for summary judgment).  You don’t need to fully understand these rules, but read over them.  Get some basic understanding of the legal process you are involved in.  Do it today.  I promise, it will help you sleep better.

Same thing goes for wage garnishments.  Find out what the laws are in your state for garnishments.  How much can they take out of each check?  Are there any exemption laws that may protect your wages?

If you are headed towards bankruptcy there are numerous resources with a ton of information.  I am a member of the National Association of Consumer Bankruptcy Attorneys (NACBA).  Go to their website (www.nacba.org).  Check out the Bankruptcy Law Network.  Check out the blog for my bankruptcy website (www.skibalaw.com/blog).  Find out what the bankruptcy  process is.  The more you know, the lower your stress will be.  Even if what you learn is not positive, just knowing what is up around the bend will reduce your anxiety.

Change Your Mindset

This one is tough.  Especially if you are getting beat over the head by collection calls night and day.  If you are well into the collection process and are still picking up and talking to debt collectors on the phone, stop it. Stop it today.  Unless you are going to write them a check, they could care less what you have to say (see my article “All Debtors are Compulsive Liars” The Training of a Debt Collector” ).  It doesn’t help your situation to talk with them and just causes more grief in your life.

Make up your mind that you are going to fight your way out of this mess.  Sometimes fighting means you will file for bankruptcy (filing bankruptcy transfers a lot of control back into your hands), but make the decision that you aren’t going to be a victim of your debt any longer.

Prepare yourself for a marathon.  It didn’t take you a couple of weeks to get into this situation; plan on it taking a while to dig yourself out.  If you don’t get it in your head that this will take some time you will become discouraged and fall back into the victim mentality which means you will likely do nothing to fight back and thus your debt problem will likely get much, much worse.  Prepare for the long haul.

“If ye are prepared, ye shall not fear.”*  Prepare yourself.  Get ready for a battle.  Take back control of your life.

*Doctrine & Covenants, 38:30.