Dealing With Debt During a Recession

Nov 25, 2021 | Debt Relief

There has been enough chatter in the financial world about an impending recession over the last year, and it only continues to get louder. Besides, some experts are of the opinion that the country is already going through a recession, and all one can wait for is an official announcement. According to a Morgan Stanley article, the possibility of a recession across most econometric models has increased from 30% to around 60% in recent times. For anyone in considerable debt, it’s crucial to know how to move forward.

Reducing Debt

Reducing your debt is always a good idea, and it becomes doubly important when a recession is in sight. This is because there is no telling how your employment status or income might change in times to come. In an adverse situation, if you don’t have adequate savings, you might end up incurring even more debt. Besides, having high outstanding balances decrease your available credit limits, which you might need to access to deal with possible setbacks.

Avoiding High Interest Rates

It’s common for recession and high interest rates to go hand in hand, as appears to be the case now. In such a scenario, people who have debts with variable rates will witness an increase in interest charges, which, in turn, will lead to higher monthly payments. Bear in mind that credit card issuers can increase interest rates by informing their customers 45 days in advance, although revised rates will only apply to new transactions.

Should You Get an Adjustable-Rate Mortgage?

Mortgage rates have increased steadily in 2022, and there is no telling when this upward trend might stop or reverse. As a result, getting an adjustable-rate mortgage (ARM) might result in rising interest charges through the course of the loan. Besides, even if mortgage rates drop because of a recession, it’s only normal to expect them to increase again when the downturn ends. In a scenario where you see a dip in income and increasing interest charges, keeping up with your monthly payments might be easier said than done.

What If You Have Trouble Repaying Your Debt?

When the country’s financial condition takes a beating, just who it might affect and to what degree is tough to say. If you find yourself in a situation where dealing with debt seems like a challenge, it’s best to know what options you have.

  • Reduce your expenses. Reducing or eliminating non-essential expenses should be the first step.
  • Speak with your lenders.Most lenders are willing to provide alternative payment plans to customers who’re going through financial hardship, so discussing your situation with your lenders might be worth your while.
  • Debt consolidation. This requires that you consolidate existing debt by taking a new loan. The main aim of doing this is to save on interest charges.
  • Credit counseling. If you feel your debt has reached a level where it’s no longer possible to manage, you may benefit by seeking advice from a nonprofit credit counseling agency.
  • Debt settlement. You can get a debt relief attorney to negotiate with your lenders on your behalf, requesting that you be allowed to pay a lump sum amount that’s lower than the amount you actually owe.


The current-day scenario is indicative of a looming recession that may teach even the privileged an important lesson – there is no getting around the laws of economics. If you’re in considerable debt, now is as good a time as any to work on repaying it as quickly as possible. If you think you might have trouble doing so, consider seeking advice from an attorney who specializes in debt relief to learn of all possible alternatives.



    • A Fresh Start: On August 2, 2023, our firm, Morning Law Group, was approved by the United States Bankruptcy Court in the Central District of California to acquire certain of the assets of a law firm formerly known as Litigation Practice Group (“LPG”).
    • New Ownership, New Beginnings: Morning Law Group’s overriding commitment is to provide exceptional service, emphasizing transparency, integrity and client satisfaction. Our operations are completely different from LPG with a laser focus on client service excellence.
    • Past Reviews Do Not IN ANY WAY Reflect Current Practices: We acknowledge the presence of negative reviews stemming from the LPG era. These reviews reflect LPG’s past practices and do not represent Morning Law Group’s standards, ethics, or operations.
    • Commitment to Compliance and Excellence: Morning Law Group operates with the utmost adherence to regulatory compliance and industry best practices. Our team is dedicated to upholding the highest standards in every aspect of our work. To this end, we work closely with a highly-respected legal ethics monitor appointed by the US Bankruptcy Court to ensure we comply with the applicable rules.
    • Enhanced Customer Support and Communication: We have completely different and enhanced customer service protocols to ensure timely, and effective communication by people who are willing to listen. Our clients' satisfaction and trust are paramount.
    • Transparent Operations: Transparency is at the heart of our operations. We encourage clients and potential clients to reach out with any concerns or questions about our services or practices. Our goal is to keep clients fully informed of the status of their matters through regular updates by email and phone. We offer extended office hours to better service our clients (6am – 6pm Pacific Time) and we have a dedicated client services email to facilitate communication.  
    • Continuous Improvement and Feedback: We are committed to continuous improvement and openly welcome feedback. Our goal is to learn, grow and adapt to serve our clients better.
    • Building a Positive Community: Our focus is on building long-term relationships with our clients and the community. We believe in making a positive impact through our work and practices in helping individuals who are fighting debt.
    • A Strong Foundation for the Future: With a solid foundation of ethical practices, skilled professionals, and a client-centered approach, Morning Law Group is poised for a future of success and positive client experiences.