That's right: financial stress Lowers your IQ.
It's not that getting into debt was necessarily stupid. But its the decision of staying in debt needlessly or because you are unable to climb out of the debt that can reduce your ability to think your way out of the mess that has become of your finances.
The stress caused by debt reduces your ability to perform intellectually. You make new, bad decisions because of stress.
The researchers from Harvard tested IQ's in a controlled setting in a shopping mall in New Jersey and in the field in a farming community in India.
Constant worry about paying bills intrudes on your thinking, and diminishes the mental resources you have to apply to all of life's decisions.
In the American lab setting, financially worried subjects lost 13 IQ points. In the field, Indian farmers who got paid just once a year improved their IQ by 25% after the harvest when they had money in their pockets and no immediate money troubles.
Wherever it's found, stress over money makes you less intellectually capable. No matter how you got into debt, being in debt reduces your ability to make good decisions about anything.
So, the challenge for those stressed by debt is to make good decisions about the alternatives to being in debt. That can be a tall order when you aren't thinking well.
Get good information. There's lots of it here on this site, from highly experienced bankruptcy lawyers.
Good financial counselors can assess whether you have a realistic chance to become debt-free in a reasonable time outside of bankruptcy.
Confront the myths about bankruptcy. Many are just that: myths. Fanciful tales unconnected to reality.
Recognize that lots of the "avoid bankruptcy at all costs" hype comes from people who profit by your continuing to pay on impossible debt, or people who want to sell you an alternative solution.
A first step is to recognize that your debts may be impairing your thinking.
Get the facts, enlist some help, and consider whether the alternatives to living in debt are viable for you.
Just hunkering down and paying the minimums, and remaining impaired may be stupid.
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