Someone severely in debt contacted us for non-judgmental help, asking if there was any hope. The steps on this page have been written to help.
By: SB ,
I could really use your non-judgemental help.
I’m severely in debt and I don’ t know what to do to get out.
Is there any hope for me?
—–
Response from Vicki Simons:
Hello and thank you for reaching out.
Yes, as long as you are willing to make some changes, there is always hope!
Review What Led to Your Being Severely in Debt
First, you need to come to grips what what led you to your present situation.
Some people wind up in debt for different reasons, including (but not limited to):
– loose fiscal discipline;
– taking on debt for a service that was supposed to pay out well (but didn’t);
– becoming a co-signer for a loan (where the person who was supposed to pay back did not and left you holding the bag);
– huge medical bills;
– large losses that weren’t covered by insurance;
– covering expenses for parents or other family members;
– the theft of all or most of one’s savings (for one reason or another);
– natural disaster (hurricane, tornado, flood, etc.) or fire (that burned up assets); and
– reliance upon investments that no longer pay out as once they did (perhaps due to market forces).
I know that there are probably other reasons, but those are the ones that come to my mind.
I don’t know which reason(s) led up to your situation, but it would be a good idea for you to identify yours.
I’m going to address this situation — in a non-judgmental way — regarding indebtedness of one’s own making:
– either loose fiscal discipline;
– or taking on debt for a service that was supposed to pay out well (but didn’t).
Consider Assets to Help You Start Conquering Your Debt
Second, consider all of your assets — including your own intelligence — and consider your options.
If you are currently driving a truck for a living, please understand that there are many limitations to your earning potential.
Truckers in the USA can only drive according to the time as specified by the federal Hours of Service regulation.
Do you have a home support team member who has earning potential currently not being tapped and who can get a job?
There is also the option for you to earn a second income from the cab of your truck, but if you’re already in debt, you may have no discretionary income to put toward business overhead. (See more on this below.)
“Discretionary income is disposable income (after-tax income), minus all payments that are necessary to meet current bills.”
— Wikipedia
List All of Your Accounts With Debt
Third, you will need to list all of your accounts where you have debt, the amount of debt in each one, and the percentage rate you’re paying.
That is to say, if any of those accounts has compound interest associated with them, please be aware that depending on your situation, the interest payments alone can eat up your paycheck and leave you nothing left over to pay off the principle on your acccounts.
I have included an image here to visualize this.
List Your Expenses and Reduce As Much As Possible
Fourth, you will need to list all of your current expenses and seek to reduce those as much as you can.
I encourage you to evaluate any “extras” that you’re currently enjoying but which are not critical.
Can you scale back, such as by:
– trading a newer vehicle for an older one;
– getting rid of — or reducing — monthly-paid products or services you don’t absolutely need (such as cable TV); or
– switching from “leased” objects to those you can own outright?
A Lower Rate Consolidation Loan Can Help Those Severely in Debt
Fifth, some people encourage folks to seek a lower-percentage rate consolidation loan, which may work if you don’t take on additional debt in the process.
While lower interest rate credit cards can be a good idea, bear in mind that there may be an “origination fee” associated with debt transfers.
(According to Wikipedia, “An origination fee is a payment associated with the establishment of an account with a bank, broker or other company providing services handling the processing associated with taking out a loan.”)
Stopping the compound interest working against you can really help you get a handle on reducing debt.
Determine Your Approach to Reversing Being Severely in Debt
Sixth, there are a couple of different approaches to paying off debt:
– either paying off the account with the smallest balance first;
– or paying off the account with the highest interest rate first.
One finance author has written about “the debt snowball method,” which one blogger has described as
1. Make a list of all of your debts, from smallest to largest.
2. Make the minimum payments on all of your debts, except the smallest one.
3. For the smallest debt, pay as much as possible.
4. When the smallest debt is cleared, roll that payment over to the next one on the list.
5. Repeat this process until all of your debts are cleared.
Be Reasonable About Reducing Expenses to Reduce Your Debt
Seventh, seek to reduce your trucker expenses where you can, such as by choosing to eat more meals in your truck versus eating out in restaurants.
I encourage you to be reasonable about reducing your expenses so that you don’t put yourself in total deprivation mode and lose motivation to keep going on paying off what you owe.
Can You Earn a Second Income to Help You Eliminate Debt?
Eighth, while there are varying thoughts on this, we do not recommend filing for bankruptcy.
Can you possibly find some kind of second income that you can earn from the cab of your truck?
In looking at one online resource, I have found job listings for “remote” or “work from home” and “part time” work.
I encourage you to be honest on your resume and that you apply only for jobs that are genuinely interesting to you.
I also encourage you to look for jobs that will be worth your while (not low-balling your expertise and experience).
Reject All Get-Rich-Quick Schemes and Legally Risky Moves
Ninth, do not attempt any get-rich-quick schemes or any actions that could land you in legal hot water.
For example, some truckers may be tempted to engage in the following with a promised large payout:
– either smuggling (hauling illegal aliens);
– or transporting illegal drugs.
In all the time that I’ve been writing my TDMST Weekly Round-Up trucking commentary, I have never seen cases like these end well for any trucker who is caught.
Above all, don’t risk your CDL, your job, or your trucking career to even consider these courses of action.
Honorably Pay What You Owe
Tenth, seek to be honorable in every endeavor that you undertake to pay off your debt.
I hope that you understand that right now, if you owe any money, you are a slave to the lender(s).
We want to see you be free from any and all debt — and to start saving money!
Selected Scripture Verses About Money and Finances
If I may, I’d like to list some Scripture verses:
“The rich rule over the poor, and the borrower is slave to the lender.”
— Proverbs 22:7
“For the love of money is the root of all kinds of evil. By craving it, some have wandered away from the faith and pierced themselves with many sorrows.”
— 1 Timothy 6:10
“Keep your lives free from the love of money and be content with what you have, for God has said: ‘Never will I leave you, never will I forsake you.'”
— Hebrews 13:5
“Be indebted to no one, except to one another in love. For he who loves his neighbor has fulfilled the law.”
— Romans 13:8
“The wicked borrow and do not repay, but the righteous are gracious and giving.”
— Psalm 37:21
“Honor the LORD with your wealth and with the firstfruits of all your harvest;”
— Proverbs 3:9
“Do not be one who gives pledges, who puts up security for debts.”
— Proverbs 22:26
Other resources with Bible verses related to money are here and here.
Wishing You Success on Reversing Being Severely in Debt
In conclusion, Mike and I wish you great success in not only reversing being severely in debt, but also being able to give generously to others later on.
By and by, will you please write back to let us know how this situation goes for you?
Thanks.
We wish all professional truck drivers safe travels and lots of money saving opportunities on the road.
Best regards,
Vicki Simons
https://truck-drivers-money-saving-tips.com/
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