What is a debt spiral?

What is a Debt Spiral?

“When I was a child and I would find a large space and spin around quickly until I felt queasy"That stopped being fun pretty quickly. That’s what being in debt feels like. Spinning, sinking and being sick.”.

Client describes her debt feelings

Are you falling behind in your basic expenses like home mortgage or rent or car loans? If you’re making minimum payments on high-interest credit cards it is likely not by choice. You’re probably in significant debt and falling further behind every month. If this describes you’re situation you’re metaphorically spinning in a debt spiral.”


Financial hardships and medical emergencies are the most often cited reasons for falling into difficulty with debt however there are many reasons this can happen. nationaldebtlaw.com debt relief advocates are here because everyone on our team believes that asking “why this happened” is less important than answering “what am I going to do now”.


Debt: $10,000 x (minimum payments) @ 18% = $38,000 over 46 years

What is a “debt-spiral”? If you’re like many Americans, making minimum payments on a $10,000 debt – with an 18% interest rate; it will take 46 years to pay the balance and also cost $28,000 in additional interest. That’s a total of $38,000. Now calculate an interest rate of 21% on that same $10,000 debt; that’s 87 years to pay off the balance while accruing more than $64,000 in additional interest. Total, $74,000. That’s debt spiraling down and out-of-control.


When discussing loans and debt there are two basic categories, Secured and Unsecured Loans.

Secured Loans are those loans that are protected by an asset or collateral of some sort. When financial industry professionals refer to an “upside-down loan” they are usually describing any secured loan “when you owe more on the loan than the value of the purchase”. For example this is often the case when you owe more than the re-sale value on an asset such as a home or boat or car.

Unsecured Loans are include things like credit card purchases, education loans, or personal signature loans. Lenders take more of a risk by making such a loan, with no property or assets to recover in case of default, which is why the interest rates are considerably higher. Past debt and interest acquired on unsecured loans may be eligible for debt reduction through negotiation with creditors and debt settlement.


Getting out of debt and repairing a compromised credit rating isn’t easy. Our experience and professional debt reduction services make it possible and we start with identifying the challenges that are causing the financial hardships in your life; then determining and pursuing the best course of action.
Trained professionals are available Monday thru Friday; 9am to 6pm (EST).

Our mission is to provide reputable, personal debt reduction services that educate and free hard working Americans from oppressive-debt and help repair compromised credit ratings. Honest answers and realistic planning from professional advocates and negotiators representing our client’s in tough economic times.

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