How To Know When You’re In Over Your Head In Debt?

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August 5, 2022
how to know when you're in over your head in debt - loanssos

The journey of life is an unexpected one at times. All it takes is one unforeseen emergency and you end up borrowing money to cover unexpected expenses. Here’s how to know when you’re in over your head in debt.

When American consumers are caught off guard with a sudden emergency, it can push their household expenses to a tipping point. A recent survey by the American Payroll Association says 48 per cent of Americans are living pay check to pay check and if their pay was delayed by even one week, they would have a difficult time paying their household bills.

Polls highlights the obvious for many consumers – Americans are stretched to their limits and there will come a time when some will be in over their head. If you are struggling to keep up with your bill payments and you feel like the walls around you are coming down and there’s nowhere to turn, it is time to contact a trained credit counsellor. A trained credit counsellor will discuss your whole financial picture and review what debt consolidation options are available to you. A credit counselling session will free your mind of stress and end the plague of debt.

how to know when you're in over your head in debt

How to Know When You’re in Over Your Head in Debt

If you do not know if you have a problem with debt management, here are some things to consider:

  1. When you receive your credit card bill, you can only afford to pay the minimum payment
  2. You are using your savings to pay your household bills
  3. All of your credit cards are maxed out and you are considering obtaining another credit card to manage with expenses
  4. You borrow money from family or friends to pay your bills
  5. On a monthly basis you choose which bills to pay every month
  6. Discussing household finances becomes a source of arguments
  7. You spend your pay cheque before you get paid
  8. Fifteen percent or more of your income is spent on paying down on your debt
  9. You are stressed out and you cannot sleep at night
  10. When the phone rings, you avoid answering it for fear it is a bill collector

If you are overwhelmed by your debt and the above scenarios are speaking to your current lifestyle, it is time to stop fighting the obvious and get help to manage your debt. You can speak to a trained credit counsellor who will review how much you pay in bills as well as your lifestyle expenses. One credit counselling session will provide recommendations free of charge to help you manage. You can call Consolidated Credit Counseling Services of Canada to speak to a trained credit counsellor..

Thanks for checking out how to know when you’re in over your head in debt.

FAQs about How to Know When You’re in Over Your Head in Debt

How do you reduce debt?

You can reduce debt by consolidating it, paying off debt faster, or asking for debt forgiveness.

What is a good credit score?

Credit scores range from 300 to 850 and is a one-number reflection of your credit history. A high score says you’re a good investment and are likely to pay back your loans. A low score says you may not have the ability to repay debts or that paying them back is not the priority that it should be.

Should I close lines of credit I’m not using?

Typically, no. (It’s also not a good idea to request lower credit limits.) While these things may help curb your spending, it can actually hurt your credit score.

How long does negative information remain on a credit report?

Most negative information (like late payments) remains on your credit report for seven years. Some information remains longer.

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