5 signs you need to get debt help

Debt trouble is often described as "snowballing" for a reason - usually, it starts with something small that escalates little by little until you're facing this huge mountain of bills that you can see no way of paying off. There are warning signs along the way, though, that can alert you that you're headed for a debt catastrophe - if you know how to spot them. 

"We find that people are really hopeful that something is going to turn around for them," says Patricia White, executive director, Credit Counselling Canada. They figure they'll find a second job to help make ends meet or figure out a way to reduce expenses, and they put off asking for help with money management.

"We'd like to see people sooner than later while there's still more options available to them," she says.  signs-you-need-debt-help

Keep an eye out for these warning signs that you're headed for debt trouble, and work on your spending habits or ask for help now, rather than later.

1. Avoidance behaviour.
An early sign that you might be in over your head financially is ignoring your bills -- "simple things, like not wanting to answer your phone for fear of collection calls or not wanting to open your mail," says Laurie Campbell, CEO of Credit Canada Debt Solutions. 

Even paying just the minimum while not facing your entire balance on your credit card each month is a sign of avoidance.

You should be scanning your entire statement, not only to check for fraud and errors, but to see what you're spending your money on each month. You should be using your statement as an aid to your budget, not just finding the minimum due and ignoring the rest. 

2. Struggling to pay bills.
It may sound obvious, but if you're having trouble keeping up with utilities, or you're struggling to pay for necessities, then you probably need help getting your finances on track, says White. 

What's worse, Campbell says, is using credit for everyday purchases because you don't have the funds otherwise. Some people justify this practice because they're earning reward or cashback points. Ordinarily, that's fine, but not when you can't pay the balance in full each month.

"As you start only making minimum payments instead of paying a statement in full, then that's a sign that things are probably going downhill," says White. 

Not only that, but if you can't afford your bills, you may start making poor decisions, White says, such as sacrificing a good diet for cheaper, less healthy options. You may think you're saving money this way, White says, but really, you're going to end up with bigger problems, such as health issues.

3. Paying credit with credit.
"There is a big element of individuals who have tapped out everywhere else and have started to rely on payday loans as king of the last resort," says Campbell. The crippling interest rates with these kinds of loans means you may never be able to get out of debt. 

While relying on payday loans may seem like an obvious sign that you are struggling financially, you might not pick up on similar cues that are more subtle, but just as worrisome.

"It creeps up on you," says Campbell. "A fairly big red flag is you're borrowing from one credit card to pay another or borrowing from one type of credit to pay another." 

4. Stressing out over your finances.
"If you're feeling stressed about your financial situation, that's a sign that you need help," says Campbell. 

Stress can affect every aspect of your life: "Not being able to sleep, maybe missing work because you're stressed or not performing as you should, not enjoying family time anymore," White says.

You may also begin having arguments with your partner or spouse about your finances, says Campbell. Or, you may avoid each other because you don't want to discuss finances. 

If your debt is causing you this much strife, it's time to get help.

5. Sensing a debt pattern.
Everyone has a tough month or two once in a while, or a financial emergency that makes it tough to cover the bills for the short term. But if you notice it's been more than six months with no respite, you might be falling into a crippling debt pattern.

"If you're finding yourself further and further in debt month over month over month, that's definitely a pattern and a problem brewing," says Campbell.

If you notice any of these signs, don't be afraid to reach out to a professional: a credit counsellor or debt adviser, or any other free debt help organizations.

"People are embarrassed about not managing money properly," says White. That can lead to avoiding seeking help. "In truth, what you really need to do is seek help sooner than later. Because the longer you leave it, the fewer options there are."

See related: 5 signs it's time to step away from the plastic, What is the 'right to offset'? How bank clause could worsen your debt

Updated January 26, 2017

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