by Stanley Wong

Created on: May 31, 2008

A sudden illness or the loss of your job may make it impossible for you to pay your bills on time. If you find you cannot make your payments, contact your creditors at once and try to work out a modified payment plan with them. If you have paid your bills promptly in the past, they may be willing to work with. Do not wait until your account is turned over to a debt collector. At that point, the creditor has given up on you.

Referring to over indebtedness as the number two family financial problems, the following listed as the most frequent reasons for indebtedness:

1. Emotional problems, such as the need for instant gratification, as in the case of a man who can't resist buying a costly suit or a woman who impulsively purchases an expensive dress in a trendy department store.

2. The use of money to punish, such as a husband who buys a new car without consulting his wife, who in turn buys a diamond ring to get even.

3. The expectation of instant comfort among young couples who assume that by use of the installment plan, they can have immediately the possessions their parents acquired only after years of work.

4. Keeping up with the Joneses, which is more apparent than ever, not only among prosperous families but among limited income families too.

5. Over indulgence of children, often because of the parents' own emotional needs, competition with each other, or inadequate communication regarding expenditures for the children.

6. Misunderstanding or lack of communication among family members. For example, a salesperson visited a family to sell them an expensive set of furniture. Although the furniture was beyond the means of this already over indebted family and too large for their needs anyway, the husband thought his wife wanted it. Not until later, it was discovered that the wife relate her concern when she signed the contract; she had wanted her husband to say no.

7. The amount of the finance charges, which can push a family over the edge of their ability to pay, especially when they borrow from one to pay another and these charges compounded.

Loss of a job because of garnishment proceedings may occur in a family that has a disproportionate amount of income tied up in debts. Another possibility is that such a family is forced to neglect vital areas. In the fanatic effort to rob Peter to pay Paul, skimping may seriously affect the family's health and nutrition and neglect the educational needs of children. Excessive indebtedness may also result in heavy drinking and gambling, neglect of children, marital difficulties, and drug abuse. But help is available to those debtors who seek it.

Learn more about this author, Stanley Wong.
Click here to send this author comments or questions.