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My wife and I are generally responsible people. We have a pretty good idea of how much we earn and how much we spend. We live within our means, and we are careful not to go into debt.

A number of years ago, however, we decided to give our kitchen a facelift. We put aside $3,000 to cover the job, which was supposed to be purely cosmetic. The problem was that soon after the work began, we discovered that the kitchen plumbing was in terrible condition and needed to be replaced. Once we had to redo the pipes, most of the old kitchen had to go.

We tried to keep the expense down, but the job ended up costing $14,000. I had no choice but to borrow $11,000 from a friend to cover this unexpected expense.

That loan has been haunting us ever since. Whenever we come up with extra money, we put it toward the loan, but despite all our efforts, we still owe most of the original amount. We just cannot seem to pay down this debt.

Needless to say, I cannot look my friend in the eye anymore. What should we do?

First of all, we commend you for being careful about not going further into debt. Many people who find themselves in a small amount of debt, which they cannot pay back, continue to fall further and further into debt. You have successfully avoided that trap — and that is a remarkable achievement.

You say you have a “pretty good idea” of how much you earn and how much you spend. Were it not for the fact that you owe money, that would be fine, as long as you can make ends meet and pay all your bills.

But as soon you go the slightest amount into the red, approximations are not good enough anymore. If you owe money — regardless of how much you owe — you need to be working with an exact budget.

The first step toward climbing out of debt is coming to an awareness of exactly how much you are earning, exactly what your household expenses amount to, and exactly how much money you can set aside every month to repay your debt. Mesila has questionnaires that can help you obtain an accurate picture of your financial situation.

The amount you have left — be it $50 or $500 — to pay down your debt every month is unimportant. What is important is to determine how much you can afford to pay back regularly and to work within an orderly, predictable budget.

If you find you have nothing left at the end of the month, you have no choice but to find an additional source of income that will go directly toward covering your debt. Either you and/or your wife could take on additional work, or you could cut down on some of your household expenditures and put aside the extra money toward the loan repayments.

Once you know how much you can afford to pay back every month, calculate how many monthly payments it will take to pay off the debt. You will then have a workable repayment schedule to present to your friend.

If you feel uncomfortable approaching your friend, have a third party do this on your behalf. Once your friend agrees to the repayment schedule, all you need to do is stick to it.

Another, less desirable option is to borrow money from a different source to repay the first loan. This should be done only if two conditions are met: (1) You can negotiate repayment that you can afford. And (2): The amount of the loan is equal to the amount you have to pay back. It can’t be less, because then you will have to contend with two loans instead of one. It can’t be more, because then the extra money will disappear, leaving you in worse debt than before.

Getting out of debt is not easy, especially when it requires you to take on more work or scrimp on things that you consider necessities. But there is no alternative. Living with debt robs people of their peace of mind, destroys their shalom bayis, and leaves them unable to focus on their davening and learning.

We are optimistic that you will be able to pay back this debt within a reasonable amount of time and continue living debt-free. The fact that you are actively seeking a solution means you have already taken the first step toward financial stability.

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