The Stages Of Debt

: Chris Lee Law Firm

  Filed under: Debt

debtDebt is a process. It doesn’t  happen overnight, but it can sneak up on you faster than you’d expect. Having a plan to resolve your debt troubles can be as easy as learning to recognize where you are in the stages of debt. There are several debt management options, each providing different benefits and risks depending on your stage of debt.


The most unrecognizable stage of debt is the first one, overspending. This happens when people begin to buy more than they can afford to pay off at the end of the month, or within three months for large purchases. This is also commonly seen with people who charge non-essentials to their credit cards. Fortunately, once you can recognize this step the rest is easy to manage. Simply set a budget for yourself and stop overspending on your credit lines. If you can get your spending under control, you won’t need more drastic debt relief measures.

Treading Water

This is the step in which people begin to notice they  have a problem. It is characterized by the inability to pay more than minimum payments or transferring balances from one card to another. While neither of these may seem problematic, most people don’t recognize this as a sign of things to come. If you are at this stage of debt, you can better manage your debts in two ways. First, review your expenses and eliminate unnecessary spending. Use this extra money to pay toward your balances each month until you begin to pay down your debts. Second, credit negotiations is a good way to take control at this stage. Before you miss a payment, contact your creditor to negotiate a lower interest rate or reduced monthly payment requirement.

Missing Or Late

By the time you have missed one or more payments, your credit is most likely going to be affected. At this stage there is really only two solutions, negotiate with creditors or file for bankruptcy. Debt negotiation can help you lower your monthly payments, waive delinquency fees or reduce the amount of debt owed on the account. By securing a payment agreement, your creditor can remove the negative marks from your credit standing. If you cannot afford to repay your debts or are unable to secure a debt repayment plan, filing for bankruptcy can assist you in achieving your debt relief goals.


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