Debt Fatigue


DEFINITION of 'Debt Fatigue'

When a debtor stops making payments on his or her debts and starts spending again after being overwhelmed by the amount of debt incurred and the seeming futility of the debt repayment process (the overall amount of debt owed does not appear to dramatically lessen as payments are made). Experiencing debt fatigue may eventually cause the debtor to declare bankruptcy as a last-ditch effort to resolve the situation.


Loading the player...

BREAKING DOWN 'Debt Fatigue'

One of the worst and most immediate effects of debt fatigue is that the debtor may start to overspend and incur more debt again. Increasing the debt load will not help the debtor's financial situation and is likely to drive the debtor to insolvency.

In order to make debt fatigue less likely to occur, a debtor should stop incurring additional debt and also make a repayment plan that allows the debt to be fully repaid sooner rather than later. By not dragging the debt out any longer than necessary, the debtor will start seeing more dramatic results of the debt repayments sooner, preventing him or her from becoming unmotivated by the overall debt burden.

  1. Debt Collector

    A company or agency that is in the business of recovering money ...
  2. Peak Debt

    The point at which a household or economy's interest payments ...
  3. Repayment

    The act of paying back money previously borrowed from a lender. ...
  4. Insolvency

    When an individual or organization can no longer meet its financial ...
  5. Debtor

    A company or individual who owes money. If the debt is in the ...
  6. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
Related Articles
  1. Investing

    To Invest Or To Reduce Debt, That's The Question

    Find out how you can make use of that excess cash and improve your financial situation.
  2. Retirement

    Conduct A Financial Intervention

    Find out what you can do to help someone who is finanically out of control.
  3. Budgeting

    Negotiating A Debt Settlement

    If you're being harassed by a debt-collection agency, you can take charge. Find out how.
  4. Credit & Loans

    7 Tips For The Do-It-Yourself Debt Manager

    Hired gun not in your budget? Learn to be your own credit counselor.
  5. Credit & Loans

    Steps To Getting Out Of Debt

    Learn how to get your bank account back in the black and reach your financial goals.
  6. Credit & Loans

    Digging Out Of Personal Debt

    Find out why good intentions can put consumers in an even bigger hole than before.
  7. Options & Futures

    Top 7 Most Common Financial Mistakes

    Choose fortune over disaster by avoiding these money traps.
  8. Investing

    What a Family Tradition Taught Me About Investing

    We share some lessons from friends and family on saving money and planning for retirement.
  9. Budgeting

    Preventing Medical Bankruptcy

    If you’re worried medical expenses could overwhelm you, there are some thing you can do to ease your concerns.
  10. Credit & Loans

    How To Minimize Holiday Debt Before It Happens

    Holiday expenses can drown you in debt. Find out how to avoid this festive spending hangover.
  1. Are secured personal loans better than unsecured loans?

    Secured loans are better for the borrower than unsecured loans because the loan terms are more agreeable. Often, the interest ... Read Full Answer >>
  2. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  3. Can a 401(k) be taken in bankruptcy?

    The two most common types of bankruptcy available to consumers are Chapter 7 and Chapter 13. Whether you file a Chapter 7 ... Read Full Answer >>
  4. Can Sallie Mae loans be consolidated?

    Sallie Mae loans can be consolidated with other federal loans, but not with private loans. For federal loan consolidation, ... Read Full Answer >>
  5. How does Sallie Mae disburse funds?

    Sallie Mae is the number one provider of financial aid and student loans in the United States, servicing over 25 million ... Read Full Answer >>
  6. Do Sallie Mae loans go directly to your school?

    Sallie Mae is the biggest provider of financial aid and student loans in the United States. The company operates as a private ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center