[COLUMN] Are you facing a debt crisis?

NO one ever wants to face a debt crisis but at one time or another in your life, you may have to deal with one.  Having debt problems does not make you a bad person although some people feel a sense of guilt as they feel responsible for the decision that they have made that led them to their present circumstance.  But keep in mind that no one is exempt from the difficult challenges that life throws at us at times, and this could easily happen in the area of finances.

Most people do their best with the resources that they have but sometimes, it’s simply not enough. What do you do after you’ve gone through all your savings and emergency funds and perhaps even depleted your retirement plan just to stay afloat? Since the start of the pandemic, unfortunately, this is a reality that a lot of people have had to face. This week, millions of people who have been living on EDD will lose their safety net as their benefits will no longer be extended. If this describes your situation, you’re in good company. But what can you do to get out of this financial mess?

You may be in a serious debt crisis if you can’t even afford to make the minimum payments on your debts every month.  When this happens, the solution is not to borrow more even more money because there is no way that you can just borrow your way out of debt.  The first step is obvious: Stop borrowing and find a way to reduce or eliminate debt so that you can get your spending under control. If you are always spending more than you make, I guarantee that you will never get out of “crisis” mode.

If your debts are huge but you are at least able to meet your monthly payment obligations, you may not be in a serious debt crisis, but you may be in what’s called a “debt trap”, if most or all your monthly payments are just barely covering interest charges. Now the reason it’s called a trap because that’s exactly what it is.  It means that you will be stuck in debt for the rest of your life with no way out. It’s not a place that you want to be but sadly, it’s a reality for a lot of people who have bitten off more than they could chew.

I am talking about the people who have maxed out their credit cards and sometimes have even gone as far as desperately taking out payday loans for “quick cash” just to survive another month. But the following month, they are broke again and as expected, are in a worse financial mess than the month before. At this point, it just becomes a non-stop vicious cycle of borrowing that puts you in a deeper financial hole every month. What are you going to do when you get to a point where all your credit is maxed out and can no longer borrow?

If you are facing a serious debt crisis or realize for the first time that you are trapped in debt, the worst thing that you can do is to be in denial about your situation. Most debt problems don’t have to turn into a financial crisis if they are dealt with right away instead of being ignored.

If you are struggling with debt, I want to help you figure out your best options.

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NOTE: For pandemic safety concerns, I am offering free consultations BY PHONE to anyone who needs help in dealing with their debt problems. 

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None of the information herein is intended to give legal advice for any specific situation.  Atty. Ray Bulaon has successfully helped over 5,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call RJB Law Offices at TOLL FREE  1-866-477-7772.

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