What are the warning signs of financial difficulty?

No one likes warning signs. Most people view warning signs as negative things and ignore the warnings until it is too late.

Warning signs are actually very important. If you were going to put your hand on a hot stove you would receive a warning sign to pull away so you don't get burned. This is a good thing.

Likewise, financial warning signs about your possible financial difficulty are very important. It may start off as just a gut feeling things are not going well. The sooner you react to any financial warning sign the easier the debt problem is to resolve. You may have a serious debt problem if one or more of the following is happening to you.

   I am only able to pay the minimum on my credit card balances.

   My credit card balances are at their maximum limit, or overdue.

   My total debts are more than 50% of my income.

   My mortgage is greater than the market value of my home.

   I owe money to Canada Revenue Agency which I haven’t been able to pay.

   I am obtaining cash advances from my credit cards to pay my bills.

   I am borrowing money from friends or relatives to survive until my next pay.

   I am constantly behind in my minimum payments to my creditors.

   I am being harassed by collection agents, and can’t meet their requirements.

   My wages have been garnished by an unpaid creditor.

   I have been named in a law suit. I don’t have the funds to defend, or pay.

   I am falling behind on my rent, mortgage, or essential services.

   I have a bad credit rating. No one will lend me any more money.

   Some of my assets have been seized by an unpaid creditor.

   My business is failing. I have guaranteed my business debts.

   I am currently unemployed. I have no funds to pay my debts.

   My financial situation is affecting my health, my relationships, my career.

   I am going through separation or divorce.

   I can’t sleep at night because I am so worried about my finances.

   I am obtaining cash advances from credits cards to pay other credit cards.

If you answered "YES" to one or more to these warning statements, you have a debt problem.

One of the best people you should speak with about your financial difficulties is a Licensed Consumer Proposal Administrator / Licensed Insolvency Trustee. The sooner you react to the financial difficulty warning sign the better chance of finding a good solution.

James Walker, Chartered Professional Accountant, Licensed Insolvency Trustee, is an expert at solving financial difficulties. Sometimes a Licensed Insolvency Trustee can show you how to reorganize your finances to work your way back to a sound financial position.

If you wait until the last minute, it may be too late to take corrective action. You will have to look for a more formal solution such as a Consumer Proposal, or as a last resort, Personal Bankruptcy.