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Economic Stability in Recovery: How to Tackle Debt as You Rebuild Your Life

  • What You'll Learn

Addiction is a serious problem that can take different forms, whether behavioral or from substances. Not only does it harm your body and mental health, but also your life factors like career. 

Overcoming this compulsion is typically an extremely challenging period, but it is possible with proper support and determination. If you have decided to take measures and get over your alcohol dependence, that’s extremely powerful. However, it is a sensitive period, and negative factors in life can badly affect the recovery process. For example, if you are dealing with debt collection agents at the same time. 

You can take certain steps to pay off your outstanding debt during debt recovery without adding extra stress while undergoing detoxification. 

What Is The Debt Recovery Period?

No matter how much debt you have remaining, you need to make an effort to complete the payments sooner. Your credit score can dip tremendously if you do not. When lenders see a delinquency on their loan to a debtor, they can report it to the credit bureau after a specific period.

In general, the creditor contacts their debtor after the first missed monthly payment to collect the money. However, if you do not pay off your debt within 30 days, the debt becomes delinquent, and the debt recovery period begins. At this time, the creditor reports the delinquencies to the credit bureau, which will appear on your credit report. Plus, they might send a debt collector after you for debt recovery.

Why Recovering Alcoholics Must Be Cautious with Debt?

Recovery from financial debt and recovery from alcoholism or other addictive substances are inherently two different concepts. What exactly is the connection, then? In reality, there are specific ways in which both are related. So, if you are recovering from alcohol use and are starting to get debt collection calls, quickly but cautiously pay off outstanding debts. Let’s understand why. 

In the simplest sense, people who abuse alcohol and those who continue incurring more debt are suffering from different types of addiction. So, people with self-restraint issues are at high risk of failing when they are dealing with both issues together. 

Moreover, in the case of chronic alcoholics or substance abuse users, their addiction is related to specific substances, i.e., alcohol or drugs. On the other hand, people who cannot meet debt payments on time have a behavioral type of addiction. For example, people might continue shopping with credit cards even when they haven’t paid off previous credit card balances. Then, after multiple missed payments, credit card lenders might take legal steps to collect debts. The stress in such a situation can trigger their previous habit of drinking larger amounts to deal with their problems.

Besides this, people recovering from alcohol abuse typically do not have a good financial situation at this time. When people are actively addicted to things like alcohol, it impairs their judgment and self-control. It is common for many addicts to fall into a heavy debt burden trying to sustain this lifestyle. So, after quitting, it can take some time for them to recover financially and pay off all dues. If a person is facing a debt collection lawsuit at this time, this can cause more stress and increase their risk of relapsing. 

Best Ways to Stabilize Finances in the Recovery Period

Continuously getting calls from a debt collector during the recovery period can badly impact your mental health. But with an organized plan, you can get rid of your debts faster without additional anxiety or stress. 

  • Firstly, take time to analyze your financial situation and outstanding debt as a whole.
  • List your pending payment responsibilities, like credit card bills, active personal loans, student loans, unpaid medical bills, etc.
  • Review your overall debt from these, including their details like the interest rate, existing payment plan, etc.

The best course of action is to opt for the debt consolidation strategy. There are three types of this method that you can use to pay off outstanding debt during debt recovery. Depending on your situation and personal preference, choose the method best suited for you:

Debt consolidation loan

You can combine your debts into one amount and take a debt consolidation loan to pay it off. For example, if you own many credit cards and are having a hard time paying each off, you can combine the due balances into one amount. Then, get a credit card consolidation loan to pay off the amount to the creditor. After that, slowly pay off this loan in smaller monthly payments. 

Debt consolidation program 

You can opt for a debt consolidation to repay your due balance instead. This works if you are struggling with making timely payments and just want a more manageable plan. There are reputable debt consolidation companies that offer help with credit card consolidation programs. They will talk to the creditors and negotiate a revised repayment plan for you. These can include things like extending the repayment timeline, adjusting the plan with a lower rate, etc.

Balance transfer card

Or you can get a balance transfer credit card with a 0% introductory APR. Using this card, you can pay off your combined credit card debt at a lowered interest rate. However, since the 0% APR only applies to the introductory period (typically a year), you should pay off most by then.

Conclusion

All in all, the debt collection process is understandably very stressful for individuals in recovery. But it is possible to tackle debt payoff during the debt recovery process without triggering your cravings if you plan well. 

Take the help of professional debt relief experts and use suitable strategies like debt consolidation to pay off all debts in a manageable manner. Besides that, behavioral therapies or support groups are also available to assist in the recovery journey. With proper planning and the right help, you can rebuild your financial life while overcoming addiction successfully.