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Credit Coach: How do you know when you have a debt problem

Over the past several months I have written about various personal finance topics, from consumer credit to budgeting to bankruptcy.

Over the past several months I have written about various personal finance topics, from consumer credit to budgeting to bankruptcy. But, I fear I may have gotten the cart out in front of the horse. This Credit Coach Blog is written in hopes of taking you back to the basics, by answering the question; how do you know when you have a debt problem?

In my day-to-day practice as a Licensed Insolvency Trustee, I often work with individuals that are struggling with debt repayment. Perhaps the situation has deteriorated to the point where wages are being garnished or assets have been repossessed. Often in my discussions I will hear the comment “I didn’t think I had a problem because I have/had a good credit rating or credit score.”  To that comment I would say that the credit rating is just one facet of the many tests of financial health that you should apply when assessing your household debt levels. Often a credit rating can be falsely bolstered by your payment history. A credit rating can often show you appear to be in good financial health because you are moving funds around to make the minimum payments. However, when you step back and look at the larger household budget picture, you are merely putting fresh paint over the rust with your behavior.

So what other factors should we be looking at beyond the credit rating or score? I have listed below several of the industry standard cues that indicate you may have an underlying debt problem that needs attention. A cautionary note — the list below is extensive but not exhaustive. If you find yourself agreeing with a couple of the following statements, I encourage you to try out this Financial Health Test to stress test your own financial health.

10 signs that you need debt help:

  1. You are unable to make the minimum monthly payments on some or all of your debts.
  2. You are falling into arrears with mortgage, rent and utilities.
  3. You aren’t able to pay bills by their due date.
  4. You are consistently bouncing cheques.
  5. You frequently or constantly use your bank overdraft account.
  6. You need to ask family and/or friends for loans.
  7. You’re continually relying on payday loans.
  8. You’re using one creditor to pay another.
  9. You’re being contacted by creditors or collection agencies.

And the ultimate test of whether or not you may have a debt problem is…

  1. You are feeling stressed about money to such a degree that it is affecting your life and your relationships.

Have you have identified with any of these debt warning signs? I recommend that you put a plan into action, work on that budget and talk to a professional. It’s important to take control of your debt before it hits a crisis level.


. With over 15 years in practice, Jayson assists individuals, BDO First Call Debt SolutionsJayson Stoppel is a Licensed Insolvency Trustee and Chartered Accountant with families and companies with financial difficulties in Thunder Bay and throughout Northwest Ontario. To reach Jayson by email: