Decreased Spending

• One of the immediate effects of debt burden is a decrease in your spending power. Debt means that you have a regular monthly obligation as you pay off your debt, with interest, according to the payment schedule you agreed to when you accepted the loan. This leaves less money for spending elsewhere, and may eliminate your discretionary spending altogether. Large-scale spending decreases that result from debt can slow a national economy and hurt businesses that rely on consumer spending.
  
  

Housing Issues

• Debt is also a major source of housing issues, including evictions and foreclosures. Tenants who can't afford rent face eviction after incurring late fees. Homeowners who fall behind on their mortgages may be able to seek loan modification or federal assistance, but the combination of mortgage debt plus debt from other sources can become too much of a burden and force the lender to foreclose. Even when homeowners have enough money to remain in their homes, debt can prevent them from investing in repairs and improvements, causing the property to lose value.
  
  

Bankruptcy

• Bankruptcy usually comes only after a debt burden grows to unmanageable proportions. Individuals and businesses with little chance of paying off their debt conventionally can use a bankruptcy court to seek debt reorganization or discharge, eliminating their obligations but also severely damaging their credit in the process. Courts won't hear bankruptcy cases when the filers don't have serious debt problems, so increased numbers of bankruptcy cases signify a growing debt problem across the population.
  
  

Emotional Issues

• For an indebted individual, the burden of debt can be the source of serious emotional and psychological problems. People in debt have a higher risk of suffering from anxiety and depression, which can lead to physical illness over time. The stress from a debt can even lead to divorce or suicide in the most extreme cases. This effect underscores the importance of seeking help when you face a debt burden and taking action to solve the issue as early as possible.