Debt doesn't define you: How to overcome debt shame and find solutions

When you commit to getting rid of debt, your mental stress load can instantly lighten. 

You’re doing what you need to do to take control of your finances. And the rush that happens when a credit card balance drops to $0 is hard to beat.  

There's no room for shame in your debt payoff game. But sometimes, it's hard to break out of the negative mindset that debt can trigger. You can overcome it, and we've got some tips that can help, and methods to try, from DIY to professional help via things like debt consolidation or debt resolution.

What is debt shame?

Debt shame is a feeling; debt shaming is an action. 

To feel debt shame is to feel guilt, remorse, regret, or embarrassment about your debt or how you acquired it. Negative emotions that aren’t very helpful when you’re ready to change your financial situation. 

Debt shame can come from external or internal sources. 

For example, say that you lost your job and haven’t been able to keep up with your credit card payments. A debt collector calls you up and tells you you’re irresponsible because you didn’t pay the bill. 

You know in your head that’s not true—you’ve just hit a rough spot financially. But you allow their words to hit your heart and make you feel bad about a situation that you weren’t in control of. That’s textbook debt shaming. 

Debt shaming is when someone (or something) makes you feel bad about your finances. 

Debt shaming can also happen internally when you talk down to yourself. Here are some examples of what that sounds like:

• “I’m terrible with money, no wonder I’m in debt.”

• “I can’t tell anyone about my debt—it’s too embarrassing.”

• “Thinking about my debt makes me want to cry, but it’s all my fault.”

• “I know I messed up, but how can I get these debt collectors to leave me alone?”

You get the idea. The problem with these kinds of thoughts is that they can make it even harder to turn things around if you feel overwhelmed. 

How to deal with debt shame

If you feel shame about your debt, here’s what you need to know: You don’t have to let it control you. 

Your debt doesn’t define you and even if the situation seems impossible, there are always solutions. When you turn your attention to solutions, and away from the negative feelings, it’s easier to move forward. 

Here’s what you can do to shake off the shame and focus only on your debt. 

• Shift your perspective. You have debt, but so do plenty of other people. It doesn’t matter how or why you ended up with debt. What’s important is that you’re doing something to address it. 

• Know what you owe. If you haven’t taken the time to add up your debts or make a list of your creditors, do that now. You can also use a simple app for getting out of debt to make this easier. You need to see what you’re working with to decide on your next move. 

• Prioritize. Once you have your debt list, look at which ones are the biggest priorities. A home loan or car loan is more important than a credit card. Why? Because if you don't pay them your lenders could take your home or vehicle. 

• Ask yourself “what if.” If you’re unsure where to put a debt on the list, ask yourself what would happen if you didn’t pay it right away. Could you be sued? Will your credit score suffer? When you know the worst-case scenario, it becomes less scary to deal with. 

• Get support. It may feel hard to talk about your debt with someone else, but it can be a huge help. A trusted friend or family member could be a valuable source of emotional support or encouragement. 

If you don’t have someone you can rely on for judgment-free support, you can always talk to a financial counselor or credit counselor instead. They’ve heard it all, and their goal is to help you find the right solution to your debt, not shame you for it. 

Know your options

There’s no right or wrong way to deal with debt. You have to decide what works best for you. 

Possible solutions can include:

• DIY payoff strategy. If you have the ability to organize your finances on your own and be accountable to yourself or an accountability buddy, there’s no reason not to try a self-managed debt payoff strategy. The snowball method and the avalanche method are two popular options.

• Debt consolidation. Debt consolidation means you get a loan (usually a personal loan though you might use a home equity loan, too) to pay off other debts. You then make one payment to the debt consolidation loan each month. This option can simplify your payments, and it could save you a little money on interest if your loan has a lower rate than the debts you consolidate, though it doesn’t change the amount you owe. 

• Debt management. A debt management plan (DMP) lets you streamline your monthly debt payments and repay what you owe over two to five years. A credit counselor can help you set up a debt management plan, if that’s the best choice for you.

• Debt resolution. Debt resolution allows you to get rid of debt for less than you owe by negotiating an agreement with your creditors. If you don’t feel comfortable enough to negotiate with your creditors yourself, a debt resolution company could negotiate on your behalf. 

• Bankruptcy. Bankruptcy is a legal way to either eliminate unsecured debt (Chapter 7) or repay debts over time (Chapter 13). A bankruptcy attorney is the best person to tell you whether one makes sense for your situation. 

Don’t let debt shame distract you

Your destination is a better financial future. You don’t need to take any side trips down the debt shame path. Remember that regardless of whether your debt is caused by past mistakes or forces beyond your control, you’re in charge of what happens next.