When Unexpected Debt Hits Your Life—Here's What to Do
When Unexpected Debt Hits Your Life—Here's What to Do
Nearly all of us are vulnerable to the sudden and unexpected inundation of debt. We can be sailing along swimmingly in life then suddenly, boom! Everything came crashing down at once, and now we are in deep debt. Many of us have also been taught from a young age that having debt is bad. And that only makes our problems worse.
Here we are, caught off guard by a tragic event and then slapped with the double whammy of shame and unanticipated debt!
You should be wary if you believe it is impossible for it to happen to you. Consider a hypothetical situation in which you are hospitalized for a few months due to an accident—it need not have been your fault. Does the thought of forgetting to pay your credit card bill cross your mind as you lie in your hospital bed ever occur to you?
And if you fail to make your monthly credit payments, what would happen? Your once pleasant loan officer who proposed a credit card limit increase just last month has transformed into Don Corleone and the gang! Late fees are slapped on, and the already outrageous interest continues to accrue interest on itself, and, well, you get the idea.
The question then becomes, how does one deal with unexpected financial obligations?
Stay calm and collected initially. I know, that is easy to say, but it will not do anything. Pause for a moment and formulate a strategy.
Talk to the businesses you owe money to before doing anything else. Describe your current predicament and politely request their assistance. A block on interest payments may be possible with some lenders—not all—particularly if your credit history is spotless.
In this example, let us pretend the worst and say your creditors are not cooperative. If you come to that realization, then it is time to start considering your options. Could a relative or friend provide you the money you need to settle your debts? Where does it leave your bank, if any? Borrow money from them, but make sure you pay it back over a reasonable amount of time. By taking charge of the situation, you can quickly start to reduce that unexpected debt.
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