How does debt affect lives?

In such situations, financial institutions are there to help, eager to make your dreams a reality. Of course, financing comes at a price, which can be expressed in percentages. As long as we can maintain moderation and common sense, this is not a problem. However, not everyone knows when to say enough.

A study by the National Debt Register (KRD) shows that more than half of Poles (54%) are currently paying off loans or borrowings. That is not necessarily bad news. This includes things like zero-percent interest installments used to build a credit history before applying for a mortgage.

The true scale of the problem is visible in the failure to repay debts on time. Almost one in every 11 adult Poles has overdue credit or non-credit obligations. More than 2.7 million Poles are struggling to pay their debts on time.

What does a debt spiral lead to?

Let’s start with how it all begins, because the start is always innocent. Zero-percent installments for essential home appliances, a credit card, an overdraft, a vacation loan. All of this raises our standard of living and allows us to make purchases right now, without saving and without waiting. It’s so convenient!

It’s true, it feels good to have something now rather than in six months. That is how instant gratification works; it releases happiness hormones, which in turn can cloud rational thinking. As long as your salary is enough to cover your obligations, you don't think about the problem. We reach for more and more—things, services, memories.

However, at some point, the problem of over-indebtedness arises, which means taking on debt beyond our means. In such a situation, problems start to pile up like a snowball, leading to an avalanche. We don't want to give up our current standard of living, even though we can't afford it. Delays in installment payments become longer and longer, and we desperately grasp at every opportunity to borrow more money to pay off previous debts. We turn to increasingly worse solutions, such as payday loans—resulting in even greater and higher-interest debt.

We also try to borrow money from family and friends, but our relationships begin to fade, and the only calls we can count on are from debt collection agencies.

Anyone can have a debt problem

It doesn't matter how much you earn. It can happen to anyone. From an entry-level employee to a business owner or a world-class celebrity. There are known cases of athletes who, despite earning hundreds of millions of dollars, still ended up bankrupt. That is how lifestyle inflation works, which I discussed in my materials on household budgeting.

Sure, you didn't miscalculate when buying a new yacht or a private jet and you have more down-to-earth problems, but the principle is the same. Your income is higher than your expenses, but at some point, that ratio flips. It doesn't matter why.

Of course, I don't know what happened to you or what your story is. You weren't in control of everything. Maybe your company closed and you lost your job, maybe you didn't get the promised raise, or maybe you simply had to go into debt because your child needed surgery. Every debtor's story is different. That is not what is important right now. What's done is done—you've fallen into debt and you have a problem. At this moment, you are 100% responsible for what you do about your current situation.

Debt is a serious problem

I already mentioned that banks and other lending companies will help you finance your whims or needs for a price that can be expressed in percentages. However, the deeper you get into the debt spiral, the more that price shifts from percentages to anger, tears, feelings of helplessness, depression, and many other things that no one wants to experience.

Being in debt is destructive—mentally, physically, and socially.

At first, it’s not visible. We live normally because having debt is currently treated as the norm. In some countries, it is normal to eat frogs, but such a frog must first be cooked. You cannot throw it into a hot pot, because it will jump out quickly. A frog is a cold-blooded amphibian that adapts to the surrounding temperature. That is why frogs are placed in room-temperature water and heated gradually. The frog, unaware of the danger, ends up, let's say... badly.

But what does boiling frogs have to do with debt? A lot! Debtors slowly lose their health, and sometimes their lives, in the same way. The internet is full of posts, groups, and forums where you can read stories that don't have a happy ending and have dragged on for years, like an ever-growing burden. They are full of helplessness, rage, tears, and drama.

Behind every one of these stories are real people. Families losing assets they spent a lifetime building. Marriages falling apart because normal conversation is no longer possible due to the stress or the sense of betrayal when debts were hidden until they could no longer be kept in the closet alongside other skeletons. Sometimes, it even leads to suicide.

You might not want to hear about things like this, but this is the reality for hundreds of thousands of people in Poland. The question is, do you want to join them and test how strong your mental resilience really is, or would you rather prevent it while you still can?