8 Ways to Cope When You’re Drowning in Debt


Has your debt gotten so out of control that you don’t know to handle it? Don’t just ignore it and hope it will go away. Here are eight practical ideas to help you cope when you’re drowning in debt.

Getting out of debt isn’t as easy as getting into it.

Almost 75% of Americans struggle with debt– owing an average of $37,000. Up to 45% spend half of their monthly incomes and another 14% expect to be in debt for the rest of their lives.

Staring down a huge amount of debt can be terrifying– but finding a way to get out of it could save you a lot of stress.

What do you do if you find yourself drowning in debt? Borrowing money might help your situation temporarily, but in the long run, it could make your financial situation worse.

Whether it’s controlling your spending, creating a strict budget, or cutting other expenses, there’s a number of ways for you to control your debt– or get rid of it entirely.

If your outgo exceeds your income and you need help with debt, it’s time for a change. Here are a few ways to get even and start knocking out your debt.

8 Ways to Cope When You’re Drowning in Debt

If you’re struggling with getting out of debt, you’re not alone.

Mortgage debt has almost doubled since the Great Recession and credit card debt hit $1.027 trillion at the start of 2018.

While these statistics might seem depressing, it means that millions of people are in the same boat as you right now. Many of them are working towards becoming debt-free– and you can do it, too.

Whether you’re dealing with credit card debt, student loans, or mortgage debt, it’s time to move forward and reach debt freedom.

The sooner you come to terms with your situation and create a plan to reverse your negative cash flow, the sooner you can get your life back to normal.

1) Make a List

As soon as you realize you might be way over your head with debt, it’s time to assess the situation.

Make a list of all of your monthly expenses in comparison with your total monthly income. It’s important that you don’t make any guesses. Be sure to use bank or credit card statements to see exactly how your money has been spent, and how severe the problem actually is.

Organizing everything down to the penny will help you identify weaknesses in your financial plan and potential solutions to improve your situation.

You can also get a copy of your credit report at annualcreditreport.com. This will help you keep track of everything that you owe, as well as the interest rate.

2) Create an Action Plan

With this list, it’s time to make a plan of attack.

Take the weaknesses you identified in your list and start brainstorming which solutions you think will work best, as well as how and when you’re going to implement them.

Throwing extra money at debt payments won’t be enough. Making payments without a plan to take out your debt completely will lead to your debt catching up to you. You’ll end up paying way more than you need to in interest, and it could take years before you’re free.

Start out by organizing your debts by their interest rate.

It’s generally recommended that you tackle the balance with the highest interest rate first, and then continue with the rest.

The other option is to start with a small balance with a lower rate. Knocking out the smallest one first can help keep you motivated and allow you to direct your focus towards the more serious balances.

Make a target date for each balance and commit to a plan for how you’ll meet it.

3) Bring in Extra Income

It’s easy enough to make a plan– but how are you going to pay it off? It’s important that you can generate the money to put towards your debt.

Bringing in a bit of extra income is one method to reverse the negative cash flow and help you pay off debt quickly. Here are a few methods you can try:

  • Find another job. It’s not fun to be working all day, but if taking an extra job will help bring in the money you need to handle day-to-day expenses and debt payments, then it might be worth it. Just working an extra 10-20 hours a week at a part-time job might be all you need.
  • Sell what you don’t need. Everybody has things lying around the house that they don’t use or need anymore. Anything from electronics to spare clothes or other household items will work. You can sell on sites like eBay or through an app like Let Go, or you can go old fashioned and have a garage sale.
  • Sell a car. Getting rid of things around your house can only go so far– but a car could bring in thousands of extra dollars. If you have two or three cars and you think you could spare one, consider selling one that you don’t need for some extra cash.
  • Get creative. With the internet comes a whole new world of money making opportunities. Try some alternative options like doing surveys online for cash, mystery shopping, or reviewing apps and websites.

4) Cut Your Expenses

The other way you can get the money to deal with your debt is to reduce some of your expenses. It’s a lot harder to start paying off your debt if you’re drowning in bills.

Depending on how you typically spend in your household, there are a lot of ways to cut some corners and spend less. Here are some expenses you can cut:

  • Phone service. Bills each month can start to add up–especially for your phone service. If you have a landline and a mobile phone, you can probably pick one and cut the other. You can also try to find a cheaper plan, even if it has fewer minutes or limited data.
  • Internet service. Check to see if you qualify for a subsidy for your wifi. You can also negotiate your bill or try to find a cheaper service. Another great option is to bundle wifi with mobile phone or television bills to get a better deal.
  • If you have satellite or cable television, consider disconnecting your service and using an online streaming service instead. Netflix or Hulu offer all the entertainment you’ll need at only a fraction of the cost.
  • If you eat out a lot, consider cutting down the times that you go to restaurants. Buy items on sale, make good use of coupons, and check out cheap recipes for cooking on a limited budget each day.
  • If you have a house, refinancing your mortgage and lowering your interest rate could save you hundreds of dollars every month. You can also downsize and move to a smaller apartment, or get a roommate to split the monthly cost.

5) Lower Your Interest Rate

If you’re experiencing financial hardship due to job loss, a medical emergency, death in the family, or something similar, you might qualify for a lower interest rate.

Even if you don’t have a specific reason, it never hurts to contact a creditor to see if you can negotiate a lower interest rate.

When you head into a negotiation, make sure that you have some crucial facts to tell them. Mention how long you’ve been a customer or how long it’s been since you missed a payment. If you have a good credit score, it never hurts to drop some numbers in there too.

You can negotiate a lower interest rate as well as things like lower monthly payments and fewer penalties or fees.

6) Look for Forgiveness

For student loans, you might qualify for a federal forgiveness program.

The Public Service Loan Forgiveness program is available for anyone who worked at a qualifying government organization or nonprofit for 10 years. Another option, the Teacher Loan Forgiveness, offers forgiveness up to almost $18,000 for teachers who work in low-income schools for five years.

These options (and many more) exist for qualifying candidates to have their student loans forgiven or canceled.

7) Control your Credit Cards

If credit card debt is your main concern, it’s time to make some changes in your card usage.

Start by cutting up your cards. It might not be easy, but it’s best to pay cash for most of your purchases–including groceries, clothing, and gas. You can save one card for emergency situations.

You can also try transferring your debt to a credit card that offers 0% interest. Just remember– most of those deals for 0% interest are only valid for the first 6-12 months, so be sure that you can pay it off in that time.

8) Get Professional Help

If you’re dealing with a huge amount of debt or you’re drowning in bills, sometimes reaching out to a legal professional is the way to go.

They can help you assess your debt, create a plan, and negotiate for better interest rates or forgiveness programs.

If you’re struggling to pay bills while under pressure from a debt collection company, a professional attorney can also help you deal with debt related issues. Discover more about what to do if you get a debt collection letter– and where you can find help.

The Bottom Line

When you lose control of your finances and find yourself drowning in debt, you’ll need to take some serious action to get out of it.