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What Are The Signs Of Too Much Debt?
   

Everyone has at least a little bit of debt, right? Some have more debt than others; of course, some also have more income than others as well. How can you know if you have too much debt? Should you wait for a creditor to tell you that you have too much debt and that the company will not approve you for their credit card or loan? Do you need to find out the hard way by having your credit card rejected in the checkout line at the local mega mart? Are there any red flags that can signal too much debt?

Here are the fifteen top signs that you carry too much debt:

After you pay every line item in your budget, you have very little or no money left. Let’s say you pay your rent or mortgage payment, credit cards, utilities and other bills, you barely have enough for food and gasoline. If a financial emergency were to strike you would be without funds to meet it.

Your credit cards are maxed out or close to being maxed out. You can no longer pay them down in a month or two, but instead you carry large balances on each card.

You are only able to pay the minimum monthly payment on your credit cards.

You are “robbing Peter to pay Paul”; in other words, you are using the credit cards to pay off each other or to pay for other recurring bills with them.

Are you frequently subject to overdraft fees, over-limit fees, and returned check charges? These fees can quickly eat up a hefty chunk of your budget and you don’t get any services in return.

Your debt to income ratio is too high. Ideally, you should have a less than 20% ratio. Take your monthly debt related expenses, such as credit cards, and divide them by your monthly gross pay – that is your pay before Uncle Sam hits you up for taxes, and before you pay any other payroll deductions - and the resulting number indicates the percentage of your debt to income ratio. Is it more than 20%?

Do you have to juggle bills and are there some bills that you may need to skip in order to pay others? If, for example, you are skipping the gas bill this month in order to pay the light bill, then this is a red flag that your budget is in serious trouble.

Do you have to ask friends and family members for loans to make ends meet, yet you are still falling behind on your bills?

Are you receiving telephone calls from creditors, collection agencies, and others that are trying to collect on your accounts?

Do you know how much money you owe and to whom? If not, this should be a red flag that you are most likely in over your head!

You are considering refinancing your home or taking out a second mortgage to pay off your consumer debt.

You have contacted a debt management company to help you consolidate your bills in the hopes of freeing up some disposable income.

You need your revolving debt in order to live each month. This is a surefire way of realizing that you are living well above your means and that you are spending money on things that you really cannot afford to buy.

You keep looking for new credit cards to transfer balances onto.

You have no emergency fund for those car repairs that seem to come out of nowhere. Similarly, you cannot afford to put some money toward a savings account, 401(k) or similar account.

As you can see, there are a number of warning signs that indicate that you need to apply the brakes and look for some short term as well as long term solutions to your credit problems. Fortunately, there are many avenues you can pursue to help you not only get a handle on your mounting debt, but to halt the process and climb your way out of debt before it is too late. Debt management plans, credit counseling agencies, loan options, and consolidations are just some of the tools you can use to get your finances back on track.

Click here if you are drowning in credit card debt, facing foreclosure, being harassed my debt collectors or simply feel like a victim of this economic crisis. It's my SolveYourProblem recommendation.

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by SolveYourProblem.com : 2007

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