4 Hardships That Can Fuel the Debt Cycle (and How to Escape)  


Debt is often portrayed as the result of voluntary overspending — which implies most people have chosen luxurious belongings and costly vacations over living within their means. While this may be the case sometimes, more often than not what kicks off a debt cycle is actually an unexpected life hardship.

Here are four hardships that can either start or fuel the debt relief specialist cycle, and some ideas on how to escape it.

 Job Loss

It’s never easy to deal with an unexpected interruption in income, whether it comes as the result of a company-wide layoff, getting fired or quitting on your own terms. The loss of a job can easily start you down the road toward growing debt problems, or exacerbate things if you’ve already been struggling to make ends meet.

he best thing you can do to protect yourself against the harsh effects of job loss is to build an emergency fund as soon as you can. The purpose of having emergency savings is to float you through a couple of months following a catastrophe like a job loss.

While experts often recommend having anywhere between three to 12 months’ worth saved, two professors of finance recently determined that $2,467 is the bare minimum families should aim to save as a safety net.

 Medical Emergency

Financial hardships are a prerequisite for qualifying for debt relief, so it makes sense that many Freedom Debt Relief reviews cited medical expenses as a contributing factor to needing to seek help in the form of a settlement program. One of the trickiest aspects of medical emergencies for people with and without insurance alike is they’re very difficult to anticipate beforehand. Oftentimes you’re simply left holding the bill afterward, wondering how you’ll possibly pay hundreds of thousands of dollars in sudden expenses.

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Rather than panicking and putting medical expenses on a credit card, try working something out directly with the clinic or hospital. You may be able to get on a lower-interest payment plan or qualify for hardship assistance. Check every medical bill for accuracy and dispute anything that looks questionable, too.


Did you know the average cost of divorce in the U.S. is around $15,000? As Business Insider points out, many people may experience even higher costs. The challenge of navigating finances post-divorce has certainly left many newly single people in a vulnerable position money-wise, meaning debt may have a window of opportunity to take hold.

One helpful thing you can do during or after a divorce is set up a free meeting with a credit counselor at a reputable non-profit agency. A counselor can take a look at your budget and financial standing, then offer professional and personalized advice about what your next moves could be — like coming up with a budgeting strategy to pay down debts, or enrolling in a debt management program if needed.


It may seem odd to see retirement on a list of hardships because this should be a happy event in your life. Retirement is not without its financial burdens though — in fact, many people reach retirement age and discover they don’t have the funds to repay their debts and keep up with living expenses.

According to Kiplinger, the key is avoiding credit card debt before and during retirement however possible. If you find yourself struggling with a high-interest credit card balance, try transferring the balance to a card with no interest for a limited time. It’s also important to know your rights when it comes to debt collections so you can avoid scams and harassment at the hands of collection agencies during retirement.

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These four hardships can fuel the debt cycle, but there are things you can do to try to tip the scales back in your favor.


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