10/12/2012 6:23 PM ET|
7 stages of debt deliverance
Pulling yourself out of debt is an emotional challenge as well as a financial one. Once you confront the problem, you may find yourself passing through these stages.
Many years ago, I wrote up my original seven stages of debt, as adapted from the five stages of grief described by Elisabeth Kübler-Ross in her book "On Death and Dying."
Experiencing the emotional loss of a loved one and going through the loss of your financial life are similar in some distinct ways. However, the emotional stages of debt have two additional components that the grief stages lack. And these stages are almost magical, as they can lead to a new and better life.
When I was going through my financial troubles, I distinctly remember passing through all the stages of debt. And in helping thousands and thousands of people over the years deal with their financial problems, I've clearly witnessed them passing though these same stages.
But people don't necessarily pass through these stages in an orderly fashion; they may jump back and forth. Yet in the end, the healthiest way to deal with any debt problem is to acknowledge each stage of debt and be aware of how you are feeling at the moment. This will help you understand how your emotional state may be clouding your judgment about how to deal with your debt.
If you are living with financial problems, I challenge you to identify what stage you are in now.
The 7 Stages of Debt
1. Denial: It begins a long time before the financial problem rears its ugly head and gets in your face. Denial distorts reality like a street drug. It's addictive. As an impartial observer, I've seen bad situations brewing time after time. But the person about to land in the sticky stuff often says the same thing: "It won't happen to me."
Whatever you are in denial about will wind up smacking you in the face like a cinder block on a rope. Even if you don't know what that's like from actual experience, I think you can imagine what kind of a mark it will leave.
2. Anger: In most situations, especially when it comes to money troubles, anger is a waste of time and emotional energy. Remember what I said before? Your situation just is what it is. You can be angry all you want, but things will get better faster if you can turn that anger into a fire inside of you that creates intense motivation to properly deal with the underlying situation and take positive action to repair it.
3. Depression: There is no question that money troubles are unpleasant. They typically lead to some kind of loss, and that makes us sad or even seriously depressed. The loss can be anything from cutting out the cleaning service to having to sell your home and move to a cheaper area. No doubt some of the things you might go through may be difficult, but rather than stew over them, try to put them into perspective.
If you had your choice of either dealing with what you are going through right now or getting poked in the eye with a sharp stick, which would you do? It's a no-brainer, right?
Also, for some people depression is rooted in brain chemistry. No matter how hard you try to lift yourself up, you may need to talk to a psychiatrist or other doctor about medications to help you escape the cycle of depression. I've watched the miracle of recovery from depression in ones I love after they worked with a medical professional and were prescribed specific medications. It took a while to fine-tune the dosage, but the results were lifesaving for them.
Here is the easiest advice to give but the hardest advice to follow: Suck it up or take action and get medical help so you can move on toward a solution. Bad things happen to good people. Life is unfair and sometimes cruel. It is what it is. Heard that before?
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4. Bargaining: Typically, this is the stage when your higher power is brought into the mix.
- "God, I promise I'll make all the rest of the payments on time if you can help me get out of this jam."
- "God, if you can just get me current on my credit card debt somehow, I promise I'll go to church every Sunday/be nice to my kids/work really hard for the rest of my life/never buy a $500 pair of shoes again."
You can bargain with your God (or the devil) all you want, but you might as well go outside and look for a four-leaf clover or throw some coins in a fountain. Bargaining is nothing more than wishing, and wishing is OK so long as it's not your only plan.
Bargaining also sets you up for trouble if you bargain the wrong way with debt collectors or creditors. Some people make bargains to resolve their debt by promising payments they can't make. They think if they tell creditors or collectors what they want to hear, it will make everything better. It won't. The first time you miss a payment, all bets and deals are off.
And speaking of deals, if you are bargaining with your creditors or debt collectors, get it in writing. If you don't, any bargain they make with you is worthless. Trust me, I've seen too many examples of creditors or collectors who later deny they made any such bargain.
5. Acceptance: This is my favorite stage, even though the next two are where you start putting the pieces back together. It is so full of peace and leads people down the right path. Until now, you've been like a long-distance runner going around and around in circles, lost. Once you reach acceptance, you are turned in the right direction. Now, instead of being tired and going nowhere, every step you take is in the right direction toward your new life, whatever that may be.
Once people reach acceptance, they know that what I said before is a fundamental law: Life just is what it is.
If you got your job hours cut and you are not bringing home what you used to, it just is what it is.
If you bought a home that was too expensive and now you are struggling to afford the payment, it just is what it is.
If you've been unconsciously feasting at the all-you-can-eat buffet of debt for the past few years and now it's caught up with you, guess what? It just is what it is.
6. Resurrection: Some time will pass after you take action and seek a way to deal with your financial troubles, but you will slowly notice that you are starting to rebuild your financial life. You can even resurrect your good credit rating.
If you are careful, you will be able to start saving money and buy a few luxuries again. It's OK. If you lost your last home to foreclosure, you'll be able to buy another. If your last car was repossessed, you'll be able to get another after you take care of that situation. (After my bankruptcy, I drove a $500 used postal jeep until I could save enough money to buy a better vehicle.)
Gradually, you will start to see that what I'm telling you is absolutely true. Now, you might not have as much stuff as you used to -- you might not have the three-car garage and a beautiful home on 10 acres -- but you'll have what life wants you to have, and you'll find greater joy in it.
7. Rebirth: Your life will have changed noticeably once you reach this stage. The experience of surviving your financial problems will have made you a stronger, better person.
I firmly believe you can lead multiple lives within the one that exists between the time you were born and when you die. We grow, evolve, learn and change. We grow apart, grow together and just plain grow old. Your life can be so much more than the struggles you are going through right now. You didn't get into debt overnight, and it's probably going to take some time to be reborn. But you will almost certainly be better for the experience.
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Now all we need is an article about the twelve-step program for people addicted to debt and the world will definitely be a better place.
You'll probably have to get on the waiting list though. The meetings on Wall Street, Pennsylvania Avenue, and the Federal Reserve building are booked solid for the next four years.
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