5 Signs You May Have a Debilitating Debt Problem

Watch Out For These Warning Signs of a Major Debt Problem

Keeping track of your finances can be incredibly tough for a lot of people.

There are people out there that are naturally good with money and they don’t like the idea of borrowing, so they stick to a tight budget and keep a close eye on their spending.

However, most of us are not that disciplined and we are all prone to splashing out from time to time.

It’s not the end of the world if you treat yourself every now and again, but if you let your spending get out of control, you can quickly end up in serious debt.

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Once you are in a lot of debt, it’s very hard to get out from under it again and it has a huge impact on your life.

Money worries are one of the most common causes of stress and a bad credit rating will follow you for a long time.

The problem is, people get into this situation because they don’t notice that there is a problem until it’s too late.

That’s why it’s so important that you are able to recognize the signs of a serious debt problem so you can look into debt relief options sooner rather than later.

These are 5 signs you may have a debilitating debt problem:

Refusing To Acknowledge Your Debt

When people know that they are in a bad situation but they are too stressed and overwhelmed to deal with it, they will often refuse to acknowledge it.

If you find that you don’t open letters from your creditors and you feel anxious every time the phone goes, that’s a sign that you are trying to ignore the problem and it is perhaps bigger than you like to admit.

This will put a lot of strain on your mental health, and ignoring the debt will not make it go away.

It’s far better to start looking at your options for getting out of debt right away instead of hiding from the issue.

Borrowing Money To Pay Old Debts

It’s very common for people in serious debt to borrow from Peter to pay Paul.

If you find that you are taking out new loans and credit cards to pay off old ones, that’s a big problem.

You are not clearing the debt, you are just shifting it around and as your credit score gets worse, the interest rates on new loans will increase and so will your debt.

Unless you break this cycle, you will never be debt free.

You Have No Savings

Debt is one of the easiest ways to eat through your savings in no time at all.

It’s important that you have an emergency fund in place to deal with unexpected costs and if you don’t, you will be forced to resort to borrowing even more.

If you find that all of your savings have disappeared, that’s a big indication that you have a debt problem.

Your Debt To Income Ratio Is Slipping

The debt to income ratio is a good indication of just how bad your debts are.

Take a look at how much your total debt payments are and how that compared to your income.

If you are spending over half of your income on debt payments, that’s a bad sign.

Once you start spending the majority of your income on debt payments, you will start to fall short in other areas and that often leads to more borrowing, so the cycle continues.

Your Mental Health Is Suffering

When you have huge debts and you don’t know how you are going to pay them back, it causes a lot of stress.

If you find that you are constantly worried about your debts, you are feeling down or hopeless a lot of the time, or you feel very angry for no reason, that is a sign that your debt is affecting your mental health.

Debt issues can also lead to tensions in relationships, and this feeds into the mental health problems as well.

People that are suffering from mental health issues are often reckless with their spending, making it even harder to get out of debt.

Studies show that people experience a big improvement in their mental health if they seek help from a debt relief program of some kind.

It puts you back in control and reduces stress once you start paying back the money.

What Should You Do If You Have A Debt Problem?

If you notice any of these 5 signs you may have a debilitating debt problem, it is important that you get in touch with us and discuss your debt relief options.

You can reach us on the phone or fill out an evaluation form and we will get back to you.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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