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Warning signs of debt: the top indicators you may need debt help

Posted on 5 November 2021

Written by Colin Boulton

Feeling like you are a little in the deep end when thinking about debt? Is your credit card debt racking up? Getting by on the minimum payments alone? The first step of tackling debt is identifying debt in the first place. This is often more difficult than you might initially think. There are a number of warning signs of debt which may help you to identify the problem. Once you have identified it, it is important to remember that no matter how bad your financial situation may be, there is always a solution to the problem. In this article, we outline the key warning signs of debt and point out the various ways in which you can gain support or debt relief for a fresh financial future.

Living in your overdraft

Living in your overdraft is one of the biggest warning signs of debt, and an indicator that you may be in quick need of a major change. In general, living out of an overdraft is not sustainable and will lead to a steady growth in debt. If you live in a cycle of using all available overdraft and replenishing your account only briefly on payday, you are in need of a debt relief solution. Remember that there is more to life than this, and tackling your debt can enable you to live a life outside of your overdraft where you are free to save and spend comfortably within your means.

“Maxing out” your credit cards

Credit cards have a limit for a reason, and it should not be the intention to push the limits. A credit card limit is to indicate an area outside of your affordability, and it should be respected in the same way. Maxing out credit cards is a huge warning sign of debt, and one that suggests you are living beyond your means. If you are struggling with credit card debt and worried that you cannot repay it, you probably need debt relief. A reputable Licensed Insolvency Trustee can help you to stop your interest and reduce your overall debt.

Late payments or missing payments altogether

Not making your debt payments on time is an indicator that you are struggling to cope with the amount of debt that you owe. As well as being one of the key warning signs of debt, it can quickly have a negative impact on your credit score too. If you are forgetful, set up automatic payments to dodge fees and penalties, otherwise consider debt relief options to break your vicious late payment cycle. Debt consolidation loans or a consumer proposal may help to reduce or even clear your debts, allowing you to begin a fresh financial start. Reach out to a Licensed Insolvency Trustee today.

Making just the minimum payments

Do you get by just making the minimum payments on your credit card debt or payday loans each month? Making only minimum payments is one of the warning signs of debt. It is a bad financial habit that will grow and become increasingly problematic as interest rates creep up on you. If you have hefty debt repayments, making just the minimum payments will not help in the long run. You may benefit from clearing the debt altogether through a consumer proposal or bankruptcy for a fresh financial start.

Avoiding your finances

Avoiding your finances altogether is a clear warning sign of debt. While it may seem out of sight, out of mind when it comes to debt, this could not be further from the reality. The longer you put off tackling debt, the more problematic it will become. Put the instant gratification to one side and begin working on tackling the problem so you can relax in the long run. By simply reaching out to a trusted Licensed Insolvency Trustee, they can review your finances with you and make a recommendation for a debt relief solution. No matter how bad you think your situation may be, there is always a solution to the problem.

Taking cash advances

Credit card cash advances are expensive, and indeed one of the most costly ways to borrow money, up there with payday loans. Some cash advances even charge interest rates of up to an eye watering thirty percent. If you find that you are increasingly reliant on cash advances, it could be one of the warning signs of debt. Cash advances should only be used in extraordinary circumstances, if you absolutely have to. It is a good idea to speak to a Licensed Insolvency Trustee to learn how you can borrow in a less expensive manner, or how to best tackle your debt.

Impulse buying

While most of us enjoy some window shopping and the occasional treat, others like to buy everything in sight. There is nothing wrong with this if you can afford it, but most of us cannot! While credit cards are excellent if they are used responsibly, they are dangerous if used to rack up debt without the ability to pay them off in full when payments are due. If you feel that you are not using credit cards responsibly and are racking up credit card debt that you are unsure how to pay off, you may be guilty of impulse spending. Reach out to the friendly team at Spergel to learn how you can avoid these habits and stay free from debt.

Feeling stressed about money

If you are having countless sleepless nights, feeling stressed by money, or simply wasting your life worrying, it may be a good warning sign of debt. If your health is beginning to be affected by finances, it is a sure sign you need to change something to improve your finances and subsequently your quality of life. No matter how bad you think your financial situation may be, there is always a solution, from debt consolidation to bankruptcy. At Spergel, our experienced Licensed Insolvency Trustees are here to help you find an appropriate solution for your debt.

The sooner you recognize the warning signs of debt, the sooner you realize that you may have a debt problem. This is the first step to handling your debt and moving forward with your life. Once you recognize you have a debt problem, it is important to reach out to a Licensed Insolvency Trustee sooner rather than later. The quicker it is addressed, the sooner you can begin your journey to a life free from financial problems.

To learn more about the warning signs of debt, book a free consultation with Spergel. Our reputable Licensed Insolvency Trustees will work with you to understand your financial circumstances, and advise you of your debt relief options. We have helped over 100,000 Canadians gain debt relief, and we are here to help you too.

Colin Boulton

Colin Boulton

Colin Boulton is a Chartered Accountant and Insolvency and Restructuring Professional with over 20 years’ experience as an LIT (Licensed Insolvency Trustee). He is also our resident expert on unemployment and wage garnishments and manages Spergel's offices in Eastern Ontario (including Oshawa, Peterborough, Lindsay, Ajax and Scarborough). When not at the office helping clients cross their debt-free finish lines, Colin enjoys training for and participating in triathlons.

Schedule a Free Consultation with Colin Boulton (or your local Spergel LIT) by:

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