Now here is a point many in the debt world get totally wrong. They assume that the debt someone has is the problem. That’s not true.
In fact the debt is the byproduct of another event and like losing partial vision in one eye, it’s the symptom of a greater underlying issue.
If the focus is on the debt itself then the issues that led to the debt can often go untreated.
Here are some examples:
Debt from Job Loss
Take for example the debt someone presents with after a job loss. The debt is the symptom created by the loss of the income. It is the loss of the income that is the real problem and that requires primary treatment. The debt is a secondary misdirection until that is addressed.
Debt from Addiction
Continuing an addiction, like gambling, drug use, compulsive shopping, etc., beyond ones means can easily lead to problem debt as the byproduct of the addiction. The debt is created because of the continued addiction. Focusing on dealing with the debt first does not stop the person from continuing the addictive behavior.
Debt from Illness
Let’s look at debt created by medical issues. An illness either causes a reduction in income, addressed above, or an increase in expenses as a result of a medical condition. In this case the underlying issue was the lack of health insurance or resources to cover medical expenses. If we don’t focus on that first then all it will take is a flare up of the previous condition or a new ailment to create the same situation all over.
Debt from Divorce or Break Up
When people live together in a relationship or marriage and they split apart, the resulting problem debt that develops is typically caused by the lack of cost sharing when two partiesno longer share income or expenses. The underlying issue in this case is the shift in the monthly economics and then trying to get people to be able to live within their individual incomes and not as they were when they were living together.
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Debt from Depression or Mental Illness
Dealing with depression or mental illness, like bipolar issues, can result in problem debt. It is the mental health issue that creates the problem debt. In the case of depression it is the lack of ability to make a plan, take action, or follow through that often leads to unchecked debt. In the case of someone with bipolar issues it is the combination of depression and then periods of euphoric spending that result in unaffordable debt.
It’s Not What You Think. Debt is the Symptom.
Those who have debt they feel is a problem or unmanageable will initially react to the debt as the primary issue. They will often leap at what they perceive to be quick solutions to just make their payments lower, and reduce that pain, without addressing the issue that created the debt.
In other parts of life we would not consider that to be an appropriate strategy. Take the man who can’t walk because his leg is broken. A cane is not a permanent solution. Instead he needs his broken leg fixed first.
Or how about the guy with intense stomach pains that won’t go away. It’s not the pain itself that we need to be most worried about, it’s what is causing the pain in the first place. Would you want to treat a stomach tumor with antacid?
As I said earlier, problem debt is the symptom, not the problem itself. Alone, and without emotional baggage, the problem debt is relatively easy and straightforward to deal with. The harder battle is being introspective and self-aware to change the behavior and activities that caused us to create the debt in the first place.