The Warning Signs You May Have Too Much Debt

Here are some red flags that suggest your debt may be more than you can reasonably handle:

• Only making minimum payments on credit cards.
• You’ve resorted to using a payday loan.
• You're hiding spending or bills from a partner.
• You’ve used one credit source to pay another more than once.
• You've maxed out your credit cards or lines of credit.
• Balances are not going down despite making payments each month.
• You've missed debt payments because you simply didn't have the cash.
• Anxiety and sleepless nights worrying about money. 
• You're receiving collection calls from creditors or collection agencies.
• You're putting off looking at your debt statements or adding up your debts because you know it will be bad news.
• Falling behind on paying essential bills like rent or utilities.
• You've been denied new credit by one or more lenders.
• You've tried to get ahead of your debt with the help of a consolidation loan, only to realize your debt is still growing.

Even one of the above red flags is a sign your debt could be reaching an overwhelming state. Here are some things you can do if you see these signs:

• Take stock of your situation. List all your debts, interest rates, and minimum payments. Getting clarity is the first step. You may find once you've done this that you owe more than you thought.
• Make a budget to see if you can balance things to cover all of your required expenses while making adequate payments toward your debt. If it feels like you aren't left with enough money each month, this can help you figure out why.
• Consider strategies like the debt snowball or avalanche. Paying off debts in a structured way can create momentum, which fuels motivation.
• Talk to a professional. If debt feels overwhelming, a Licensed Insolvency Trustee (LIT) can explain your options, including Consumer Proposals or Bankruptcy. Most LITs offer free consultations where they can give you non-judgmental advice.

Debt isn't necessarily a bad thing. It is part of life for most people. But there comes a point where you can take on too much debt, making it difficult or even impossible to move forward. Rather than simply let it stress you out, you need to take stock of the situation and make a plan to deal with the debt. Your worst case is not bankruptcy - it's succumbing to stress while burried under overwhelming levels of debt.  

Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee, serving the Alberta region. We regularly help individuals consider their options when they are dealing with overwhelming debt. We can help you figure out if you need to do a Consumer Proposal or a bankruptcy, or if you have other feasible options. If you'd like to explore these options, please reach out to us.

Disclaimer: This publication provides general information and should be seen as broad guidance only. The information contained herein cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon this information without obtaining specific professional advice relating to your particular circumstances. Charla Smith & Company Ltd. does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.