There is no clearer sign that you are having financial difficulties than a call from a collection agency! But you should pay attention to the more subtle hints that will help you detect and rectify a potential problem. Here are a few examples of situations to take seriously:
- Have more than one redit card with an unpaid balance;
- Are unable to lower these balances for more than 2 months in a row without increasing them again;
- Have a debt ratio of 40% or more;
- Only make the required minimum monthly payments on your debts;
- Take a cash advance out on one card to pay another;
- Have 3 or more credit cards;
- Are worried that a creditor will start calling to get paid;
- Have recently been refused for a credit loan.
When does debt become a problem?
It is a question of excessive debt when, on a regular basis and once the monthly family living expenses have been paid, there is no longer a sufficient amount of money available to make the monthly payments on your debts. Far too often, access to credit then becomes a second source of income.
How to pull yourself out?
The first and most difficult step is to be aware of the problem. Fear of being judged and embarrassment can be significant obstacles and paralyze you. But rest assured that you are not alone in this situation! By seeking help and reacting quickly, you can avoid much anxiety and many traps, and you will have more options available than if you ignore the problem.
How to prevent financial problems?
Take inventory of your debts, calculate your debt ratio and ensure that it doesn’t increase from year to year; those are the best ways to avoid getting caught up in a downward spiral of debt. Know that most people who have consulted with us never would have imagined themselves in that situation. Therefore exercise caution, regardless of the current stability of your finances!