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Should you be worried about a debt relapse?

You had a lot of credit card debt when you got out of college. You were just too busy to work, you didn't really grasp what all of that debt would mean, and you put everything on your cards.

In the five years since college, you've paid it all off. You cut back on your spending. You tackled each card, one by one, until you had no debt at all.

What are the odds that you're going to relapse?

Debt experts warn that this can be a serious issue. The problem, they say, is that people haven't really changed their mindset or their spending habits. They may have shifted things temporarily to pay off the debt, trying to accomplish that set of goals, but they'll just start racking up new debt as soon as they're done. Before long, they'll be right back where they started.

To stop this from happening, some experts suggest not carrying credit cards at all. Others suggest only having a few so that, if the relapse does happen, it can't be nearly as bad. Still others say that a secured card is the best option since you have to deposit that money first, so you can't get in over your head.

Another key is simply to have a budget. Think about your earning and spending habits with every purchase. Write out a budget that you can actually afford and stick to it. While it's tough at first, you can get settled into a routine and you can stay debt free.

If you do have a relapse, don't panic. It happens. Just make sure you know all of the legal options you have when bankruptcy is looming.

Source: CBS News, "4 ways to manage your credit card debt," Susan Gulliford, Aug. 23, 2017

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  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
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