Recently the fire alarm went off in our office building. My colleagues and I looked in the hallway, it appeared all clear and we exited the building. We overheard several people discussing why they shouldn’t leave the building and I am thinking, hmmm, the alarm is going off, no one knows if it is a false alarm, so does it matter that you are in the middle of something?
As we were exiting, firefighters arrived and told everyone to leave. As it turns out, a pipe burst in one of the offices in the building, which set off the alarm. After 20 minutes, Windsor Fire and Rescue gave us the all clear to go back into the building.
The reaction of people who didn’t want to leave the building reminded me of the reaction some clients tell me they have when they start to have difficulty paying their debt. Each person reacts to their debt alarm at different times.
When you miss that first monthly payment the reaction might be that you aren’t going to worry about it since things will get better. You will get a raise or you will get an unexpected tax refund that will give you the money to start making payments again.
When you start to get collection calls or letters, you might once again turn to the hope of a windfall.
Then you get the statement of claim in the mail. At this point you think maybe it’s time to talk to someone, but you aren’t sure who to call, so you just hope it will go away. After all, the bank isn’t really going to take you to court, are they? Your alarm rings, but you decide to ignore it.
The next notice that arrives is the garnishment order issued by the court. Now your alarm is really ringing. Now is the time for action. Payday is coming up and you can’t afford to lose any wages. You talk to your friend at work and she tells you that she was in a similar situation last year when she and her spouse split up. Your friend knew she could no longer make her credit card payments, so she called us before the debt went into collection. Your friend gives you our number and you call us.
My advice? Don't ignore your debt alarm at all. The first time that you begin to feel stressed, overwhelmed or simply start to take notice that your debt is effecting your life, seek help. The sooner you make a plan to deal with your debts, the sooner your debt alarm will stop ringing.
Many people that I meet with worry that bankruptcy is their only option, and that fear has stopped them from silencing their debt alarm. You have options and bankruptcy should only be a last resort solution. If you answer your debt alarm early enough, you may just need to create a budget that will help to repay your existing debts.
Don't wait until it's too late. Although your stress may be a one-time event, the fact that your alarm is ringing in the first place is cause for action.