This tightening spiral can only continue for some time, after which you find it impossible to service this debt, but not before it has ruined your peace of mind at work and home. However, the real nightmare starts when you start receiving calls or visits from debt collection agents.

What started as a casual overspending graduated to a habit followed by the ostrich syndrome, where you stick your head in the sand, well aware of the lurking danger, but not wanting to acknowledge it, till you are forced to wake up when the mountain of debt comes crashing upon you.
What is the way out? While every debt-ridden situation is very tough to tackle, here are a few tips that may make life a bit easier, and help you get out and stay out of your indebtedness.

Getting back into fiscal fitness

Follow the golden rule: don't borrow, don't overspend. This applies to debt availed for lifestyle or consumption needs and not for asset creation, like home loans, etc.

• Confide in your family members. Sharing your worries with them is an honest admission that you went wrong and are willing to make amends. Their love and support will help relieve you of a lot of mental and emotional pressure. Promise yourself that you will not lead yourself into a debt trap again.
• Make a budget and stick to it. Work out your monthly repayment obligations and try to manage within what's left, without resorting to further loans. Lack of proper budgeting leads to impulse buying, which should be totally avoided.
• Stop borrowing from credit cards. These loans cost anything between 36 per cent and 40 per cent a year. Moreover, you have to pay 2.5 per cent of the value of cash loans taken. It is very difficult to service any debt at these rates of interest. If you spend on credit cards, spend only what you will be able to repay fully by the due date without rolling over. Give up multiple credit cards and keep only a couple for emergencies.
• If you have some investments, think of liquidating them to repay these credit card loans, since it is very difficult to earn such returns from any investment. However, this should be only be a one-time exercise and should not be turned into a habit, or you will soon have no assets to liquidate!
• If you do not have ready assets, think of restructuring and consolidating your debt. This means to reduce the number of loans outstanding as well as converting high cost debt into lower cost ones. Availing a loan from a relative, which may be interest free, or personal loans at around 18-21 per cent a year, and using these funds to retire high cost credit card debt and then cancelling those cards can do this job.
• If you still feel at sea, consult an able financial advisor who can guide you out of your debt trap.

Are you a debt junkie?

Here's a quiz to test yourself

• Do you resort to personal and credit card loans on a regular basis to fund lifestyle expenses?
• Do you feel that a major part or all of your salary goes towards paying EMIs or credit card debt?
• Are you finding your health, work and family life getting adversely affected due to ballooning debt and the fear that others may come to know of it?
• Do you keep transferring debt from one credit card to another while paying only minimum balance due?
• Do you feel that you have reached a stage of trying to wish away your debt problems, while ignoring the mounting burden and having no concrete plan in place of how to tackle it?
• Do you borrow based on the consideration of easy loan availability, even at higher interest rates, or without even checking interest rates?

If your answer is in the affirmative, give yourself one negative mark for the first two answers, two negative marks each for the next two answers and three negative marks each for the last two. On a score of -12, if you have scored less than -4, then your bad debt habits (pun intended!) are just beginning.

Nip it in the bud before it gets worse. A score of minus 4-8 shows that you are fast approaching a crisis, and firm action needs to be taken to prevent the situation from getting out of hand. A score of more than -8 shows that you are deeply stuck in the debt quagmire and it will take a lot of effort and resolve to get out of it.

The writer is director, Touchstone Wealth Planners.