Debt is undoubtedly a stressful experience, but dying from it? According to an analysis of more than 8,000 Americans, losing at least 75 percent of overall net worth meant they were 50 percent more at risk of dying over the next two decades!
The study, titled “Association of a Negative Wealth Shock with All-Cause Mortality in Middle-aged and Older Adults in the United States” is the first time financial catastrophe and an increased risk of dying in the long term have been correlated.
Researchers collected data every two years between 1994–2014 from adults aged 51–61, ultimately finding that a quarter of subjects experienced a negative wealth shock.
Changes in wealth and debt accumulation stick with us mentally. The feeling lingers through our daily choices and hurts our self-worth, which makes sense that negative wealth shocks have also been linked to depressive symptoms and high blood pressure.
How to Handle Financial Setbacks and Debt
The initial study referenced in this article found that subjects who experienced a negative wealth shock had the same mortality as those who never had any money.
On one hand, this isn’t surprising. Being poor is constantly stressful. But people adapt to the circumstances gradually, compared to a person who’s always had the shield of wealth protecting them, only to experience the day they don’t.
But on the other, it’s starting to think decades of dealing with financial strife doesn’t contribute to worse health than someone who hasn’t experienced the constant financial turmoil. As the world economy grows and inevitably becomes more prosperous and in turn volatile, will these studies’ sample findings hold true?
In the event you experience a big financial setback or sizable debt, three things can help you cope that don’t even involve changing your financial life:
- Stay calm; don’t overreact.
- Keep a positive attitude.
- Find a support group.
For debtors (and possibly negative wealth shock victims) support groups like Debtors Anonymous can help reduce stress and anxiety. But unlike experiencing a financial setback, being in big debt requires actual financial solutions, not just lifestyle and attitude changes.
When debt becomes too great, bankruptcy and debt settlement become the only options. If you have little or no income, Chapter 7 bankruptcy discharges your debts but also seizes all your assets.
If you do have a regular income, then Chapter 13 lets you keep your possessions as long as you can make court-ordered payments for a set period. Then there’s debt settlement, which aims to forgive some of your debt in exchange for a percentage payment to your creditors. Chapter 7 is a relatively quick process (4-6 months) but Chapter 13 and debt settlement take years to resolve.
Both these options aren’t cheap, either. Bankruptcy carries expenses like filing fees, finance management courses, and attorney costs, while debt settlement charges a percentage fee of the overall debt they settle. Forgiven debts via settlement are also liable to be taxed by the IRS.
Debt settlement is also a varied market. The combination of many choices and the mental state of debtors has resulted in many scams. In fact, an example search for “Freedom Debt Relief reviews” will bring you to a section on the provider’s website warning against illegitimate companies because of this very fact.
To make the best choice, it’s worthwhile to speak with an attorney about your options and research different debt settlement providers before you decide a plan of action.
In the end, money changes are certainly serious but don’t have to be mean death. Keeping a positive attitude, seeking support from those in similar positions and taking care of yourself go a long way to correcting you’re financial (and mental) course.
For more severe circumstances, taking action on a plan starts the journey back to financial health. No matter your circumstance, adopting healthy habits and an optimistic attitude, no matter how hard it seems, will do wonders for long-term wellbeing.