Signs That Tell You, You’re in Debt, Find Help

Life provides us with many signs to help us avoid unwanted situations. For example, animals go quite before a storm, our body sweats before it overheats, and creditors notify you when money is owed. We have the ability to avoid most unwanted situations, but, that is easier said then done. It is up to us to become aware of the signs that tell us, “we are in debt, and it’s time to seek financial help.” Here are some of the signs to look for:

1. Receiving collection calls or past due notices.

Creditors are the companies you owe money to. After being in debt for specific period, creditors will transfer the money you owe to a debt collection agency. Therefore, debt collection agencies specialize in recovering money that you may owe on a credit card, line of credit, or loan.

When receiving notice that your debt is being transferred to a collection agency, you should contact the creditor right away. You may be able to make alternate arrangements with your creditor to pay back your debt. For example, you may be able to pay a portion, or the full amount owed to prevent the debt being transferred to a collection agency.

2. Spending more than your monthly income allows.

The total amount of your monthly payments can add up-quickly. A “rule of thumb” that has been stated in several resources is that your monthly payments should not exceed 15 to 20 per cent of your monthly income. This allows helps assure that you have income to cover your housing, food transportation, and other necessities.

3. Not paying credit cards in full each month or only making minimum payments.

This is a subject we talked about previously in our blog, Canadians and Credit Card Debt. We give the example that an outstanding credit card balance of $5,000 with minimum payments of 4 to 15 percent could take over 11 years to pay off.  In addition, by only making the minimum payments, you are also paying off the additional $4,000 in interest.

We are Licensed Insolvency Trustees with the knowledge and experience in addressing the financial issues mentioned above. Our expertise can address any financial challenges you may face, including managing credit and most importantly finding a way to reduce or eliminate overwhelming debt.

If you need help, contact us by emailing or call us at 416 736 4357 (HELP). You can also book a free consultation with no obligations by filling out the contact form on our home page.

Make an appointment today for a custom-tailored solution specific to your situation. We look forward to assisting you.