How does one know if they have debt problems? Basically, there are two signs – the obvious signs and not-so-obvious.

Obvious Signs of Debt Problems

The obvious signs of debt problems are when you are starting to miss payments. You don’t have enough money to pay your credit card so you skip it. Or, you are 30-60 days late on your car loan or mortgage payment. Getting collection calls is another sign.

Another obvious sign is when you cannot work out a payment plan.  You don’t have enough money to make your minimum payments so you contact the creditor to get help.  However, the creditor won’t help you.  When that happens, it is time to get help.

The final obvious sign of debt problems is when you are going to court over a debt.  Unfortunately, creditors will not wait forever to get paid.  Shortly after you default on your debt, the creditor will sue you in Court so they can collect their money.  Even if you’re broke, you won’t win the lawsuit.  If you owe the money, then the court expects you to pay it regardless of your financial situation.

No-So-Obvious Signs

The not-so-obvious signs are your mental thoughts. Do you dream of winning the lottery or getting an inheritance? Or you wish you were dead.  If you’re having wishful thoughts about getting out of debt, then it is time to look for a solution.

debt problems

Sometimes we don’t know we have debt problems, but we certainly feel the stress of our finances, which is a sign to get help.

Your credit score is an indicator.  If your credit score is below 600, then no one will give you a loan because you need to solve your debt problems.

The next test is the amount of unsecured debt in comparison to your annual income. If your unsecured debt is greater than 20% of your annual gross income, it is sign of financial distress. The dollar amounts surprise people because if you think about someone who makes $30,000 per year, their unsecured debt needs to be below $6,000. Unsecured debts are credit cards, medical bills, payday loans, lines of credit, personal loans, student loans, etc.

The final sign of debt problems are how long will it take you to repay your debts. What is nice about credit card statements is that there is a box on the statement that shows you how many years it will take you to payoff your balance. For example, if you make your monthly minimum payment, the box will state that it will take 20-25 years to payoff the debt. As a rule of thumb, if you cannot payoff your debt within five years, then it’s too much and you need help.

Solve Your Problem with Colorado Debt Help

Colorado Debt Help is here to solve your debt problems.  With offer a variety of solutions, which include debt settlement, credit counseling, debt management plans, and bankruptcy.  The right solution depends on your situation.  Regardless, we will find the right solution for you and solve your debt problems.