This is a guest post by Tisha Tolar.

Debt is no longer the taboo word it once was. The connotations of being in debt were best left to the realm of private information. But in recent months, it seems more people are willing to be open about what their finances look like and are less afraid to seek help for what they feel they can not handle for themselves. This help usually involves debt negotiation, debt settlement, or debt consolidation, either through a loan or a consolidation company.

When a debt is settled and bankruptcy avoided, one can feel victorious. The weight of debt is off their back and they are happily making plans for all that extra “bill money” they have left over each month. Many will take that “extra” cash and spend it without another thought. Some will invest it more wisely. The reality is that many will fall right back into the habits of what got them in debt in the first place.

The old cliché “once a cheater always a cheater” may ring true for debtors as well. Once you have crawled out from the abyss of debt, you would naturally think you would do all the right things the next time around. Not so. Sure, there will be some consumers who will make all the right choices moving forward but a large majority will not. These individuals will still fail to budget and do the other things that are necessary to keep themselves on the right financial track. History is destined to be repeated.

What do you do in life after debt?

Request Your Credit Report

When you recover from your consolidation, you need to know where you stand. Order a copy of your free credit report and look at every bit of information it contains. You’ll want to check to see that information had been reported correctly and that there are no additional errors that could bring down your credit score. Report the errors and corrections immediately to the credit bureau by following their standards for requesting an investigation. After several months, go back and order another report with a credit score, which you will have to pay to receive. Review the information on the report and see what has changed. You should be reviewing your credit report every year, especially before you are about to apply for new credit.

Set Up a Budget

Budgeting is an essential aspect to your financial health. Not only does it tell you how much money you have, it tells you how much you are spending and, most importantly, how much you have to spend. Without a proper and proactive budget, you can certainly overspend. Overspending leads to debt. If you want to stay on track financially month after month, create and review your budget all the time. As income and expenses tend to fluctuate due to unexpected expenses and maybe even a surprise bonus from work, your budget needs to be accurate. Failing to budget is a sure sign you are not serious about staying out of debt.

Evaluate Your Income

There will be individuals who fell into debt because while the cost of living keeps increasing, the amount of pay they earn is not. By taking a good look at your income, you realize you are simply not making enough to live on. Supplemental income is one option but a career change or new job search may be in the cards for you and your wallet.

Stop Applying for Credit

Sure, it’s reasonable to have one or two credit cards to help improve your credit score and for emergencies but having 5 or 10, especially after you just went through a consolidation is asking for trouble. Use only the one or two regularly and leave the rest in a safe place if you don’t want to close them out and further lower your credit score. Don’t apply for new credit, unless you absolutely have to like when you are buying a home, and only apply for credit when your credit report is back in the good zone, or you’ll waste money paying higher rates.

You don’t have to be a debtor all of your life. You can still live comfortably if you learn to manage your money, budget your income, and limit the amount of credit you use. Keep in the back of your mind how you felt when you were on the verge of bankruptcy, with no relief in sight and how difficult the task was to first contact debt consolidation firms for help. Let that serve as a reminder of why you need to keep practicing positive money habits.

Tisha Tolar is a writer for, where she provides information about credit card consolidation, debt relief and how to get out of debt.


Neil July 8, 2009 at 7:25 am


Absolutely essential advice for anyone in debt. Too much of the debt advice/information out there (especially for people in a debt crisis situation) concentrates only on the detail of how to get through your debt problem using bankruptcy, consolidation etc.

I recommend that people take time to think honestly about the habits/emotional problems/practical issues that led them to overspend in the first place. Unless these are considered and dealt with it is almost inevitable that the debt cycle will repeat itself.

Neil’s last blog post: The Elusion of Financial Freedom That Debt Can Bring

Miranda July 8, 2009 at 9:17 am

I think that debt is a lifestyle. It can be difficult to break out of that mind-set, even after you go through settlement or consolidation. It can be hard to move beyond a debt lifestyle that focuses on instant gratification. I think that these ideas are helpful, though, in terms of making lasting lifestyle choices.

Miranda’s last blog post: YNAB offers Budgeting Mom Contest

J. Money July 8, 2009 at 5:58 pm

See how that budget always sneaks itself in?! Gotta love that 😉

J. Money’s last blog post: Best Financial Calculators!

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