Consumers are dodging more financial obstacles than ever before, and it can be difficult to pinpoint when debt is shifting from a manageable payment to a growing problem.
Blair Mantin, President of Sands & Associates, BC’s largest firm of Licensed Insolvency Trustees focused on debt help services for consumers, joined CTV News Vancouver to share some key warning signs about problem debt that shouldn’t be ignored.
Watch the clip here, and read on to learn more about common triggers that prompt people to seek debt help, and what to do if you recognize warning signs about problem debt:
Consumer Debt Warning Signs
There can be calculable signs that debt is becoming a problem, but in the experience of many Licensed Insolvency Trustees, and as supported by multiple survey findings – the number one warning sign of a debt problem for people is:
- Feeling Overwhelming Stress About Debt and Finances
People we work with often express how their debt-stress manifested for them mentally and physically –impacting some people to the point where they experienced serious depression, anxiety and even suicidal thoughts.
If you are experiencing overwhelming stress or any of the following, please know that you are not alone – and that there are solutions to help you take back control of your debt. Are you:
- Constantly worrying or thinking about your debt?
- Experiencing anxiety or desperation about your financial situation and what to do about it?
- Feeling like your debt situation is out of control, helpless or hopeless?
Connect with a local Licensed Insolvency Trustee right away. We are Canada’s qualified professionals who can offer you advice about your situation and help you put together a plan of action to deal with your debt and get a financial fresh start. In less than an hour you can have the solution – and relief.
- Avoiding Dealing with Your Finances
Whether you’re uncertain what to do or are too overwhelmed to put together a plan, procrastinating on facing financial commitments often means there is a problem. Does any of this sound familiar?
- Avoiding adding up your account balances
- Letting bill payments and/or creditor correspondence stack up because you can’t clear it
- Downplaying or hiding your financial situation from a spouse/partner/impacted household member
- Putting off filing your tax returns or other Canada Revenue Agency paperwork because you know you owe money
It can be very difficult to admit that a debt problem exists. The truth though is that it’s always better to confront the challenge – and without doing that the problem is almost never going to go away.
We understand that many people feel embarrassed or ashamed that they haven’t been able to manage their debts and other money matters the way they wanted to. No matter what, you are entitled to live with dignity and without the overwhelming stress of debt.
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- Always Using Credit
If you’re making payments on your debt and experience any of the following, it’s a good indicator it’s time to seek professional support to deal with your debt and break the debt cycle:
- You always seem to lean on credit cards or overdrafts between paydays, or for unexpected expenses
- Money gets shuffled between credit products to keep accounts up to date
- You’re regularly borrowing from family or friends, or taking payday or other ‘fast cash’ type of loans
- You Can Only Afford Minimum Monthly Payments
This is a sign your debt is likely an issue and may become a long-term problem. Making payments that only keep your accounts paid up to date isn’t enough to truly get out of debt.
- Even a relatively ‘small’ credit card balance can take literally decades to clear if only minimum payments are made – i.e. $6,000 debt today could mean 40 years of payments with only minimum monthly payments being paid
- Be sure to look closely at your credit card statements – by law the credit card company is required to tell you exactly how long it will take to clear the debt if only minimum payments are made
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- Your ‘Rule of 60’ Math Doesn’t Add Up
Carrying debt is expensive and takes money away from your future self. The ‘Rule of 60’ math is an easy way to “test” your debt-free plan: Divide your total (non-mortgage) debts by 60 – does the number come out to a monthly payment you could afford for the next 60 months?
- If the outcome from your ‘Rule of 60’ calculation doesn’t look anywhere near affordable, or you’re doubtful that you could consistently pay it in order to get your debts paid off in 60 months (that’s 5 years), you’ve got another sign that you may want to talk with a Licensed Insolvency Trustee about resources to help pay off debt.
How Does a Debt Problem Start?
A debt problem can happen to anyone, at any time. If you are facing a debt problem please understand that there are many events and circumstances out of our control that cause financial strain and can quickly turn into a more serious issue. We often work with people who need help resolving debt problems that have been triggered by unanticipated events such as:
- A reduction in household income due to job impacts (the COVID-19 pandemic for example)
- Health problems in the household that cause extra costs or a loss of employment hours
- Establishing a household and/or maintaining one on a single income after a relationship breakdown
Despite our best laid plans and intentions, unanticipated financial challenges do happen! Unfortunately, many people temporarily lean into credit to bridge the gap between income and expenses, and catching up is often much more difficult than expected.
Know Where to Turn for Help with Debt – a Licensed Insolvency Trustee
In Canada Licensed Insolvency Trustees are the one professional endorsed, qualified and fully empowered by governments to help consumers with debt. We can help you assess your situation and evaluate all your options so you can make informed decisions, and take back control of your future.
- Even if your situation does not require a formal process, we can assist you in gaining knowledge about debt resources and remedies that may offer you the relief you need to get back on track.
- There is no cost to connect with a Licensed Insolvency Trustee for assistance, and no referral is needed.
You are not alone in dealing with your debt – Sands & Associates’ BC Licensed Insolvency Trustees are here for you.
Get non-judgmental support, confidential advice, and a debt-free plan that’s right for you – book your free debt consultation today.