What’s the Difference Between Being in Debt and Financial Crisis?

If you are not sure if you are in too much debt or not, or if you are worried that you are in a financial crisis right now, then there are ways that you can gain clarity on your situation.

So, what’s the difference between being in debt and having a financial crisis?

You Don’t Know How Much You Owe

If you don’t know how much you owe, then you are not in a financial crisis.

So many people don’t know how much they owe or even how much their minimum payments are, but if you are having a hard time facing your debt or if you are hiding from it because you know it is more than you can afford every month, then this would signify that you are in a crisis.

One way for you to find out everything you need to know would be for you to pull your most recent statements from your creditors and then make a list of all of your debts.

This will give you the chance to confront what you owe so you can make an active plan to deal with it.

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You Pay your Bills Late

If your debt payments are more than you can afford every month, then you most certainly are facing a financial crisis.

If you know that your debts are high but you can manage them then this would signify debt.

If you want to help yourself here, then you need to look at your monthly spending so you can eliminate certain expenses so you can afford your bills much more comfortably.

You Don’t Answer the Phone

When you have debt collectors calling you, this means that your debts have become delinquent.

You are now probably not able to afford them, and you may even find that you end up not answering the phone, so you don’t have to deal with them.

If this sounds like you, then you are in fact in a financial crisis.

Your debt collection agency may decide to sue you and if they win the lawsuit then they may be able to levy your bank account or garnish your wages.

This is the last thing that you need, so make sure that you always seek out options such as filing for a consumer proposal if you know that you are going to be struggling.

You’re Borrowing Money to Pay Your Bills

If you have to pay your bills with loans from either friends or family, then you have too much debt and therefore are facing a financial crisis.

It’s important to know that you will eventually run out of places to borrow money from and you will have to face the debt that you have accumulated through your friends and your loved ones.

Reducing your bills or increasing your income will make it way easier for you to afford everything without having to borrow money.

You’re Losing Sleep

If you are worried about your debt to the point where you’re losing sleep, but you are able to afford your repayments then this would signify that you are in debt but not facing a financial crisis yet.

If you are unable to make your minimum payments, then this would signify that you need to make a rapid change.

If you feel as though there is no way out of your debt then contact Bankruptcy Canada today to find out more.

We can then give you the advice and support you need to navigate the process.

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