13 Warning Signs That You Have a Debt Problem

If you're not sure if you have a debt problem, Laura breaks down 13 warning signs you should know. You’ll learn red flags to watch out for that could prevent you from building wealth and solutions to turn around your financial life.

Laura Adams, MBA
8-minute read
Episode #564

12. You lie about your finances.

If you’re lying to family or friends about your spending habits or how much debt you have, it’s because you know deep down that there’s a serious problem. If you’re worried, losing sleep, and having trouble concentrating due to debt, it’s time to take action.

Create and stick to a realistic budget, make an appointment with a financial planner, or see a debt counselor. The National Foundation for Credit Counseling at NFCC.org is a great resource.

The only way to improve a bad situation is to be brave and face it head-on. Denying a debt problem only makes it worse and prolongs your agony! The sooner you address it, the sooner you’ll make positive financial changes.

See also: Facts You Should Know About Old Debt and Zombie Collections

13. You’re getting calls from debt collectors.

When debt collectors start calling you, your debts are seriously delinquent and you have a big-time debt problem. If you don’t face past due debt head-on, you could end up in a lawsuit, have your wages garnished, have your home foreclosed, or have a vehicle repossessed.

Be cautious about communicating with a collector on the phone. Even a short conversation is risky because you could accidentally say something that gives them a leg up or resets the statute of limitations on an old debt.

Never admit that you owe a debt or engage in conversation or debate about the issue. Just ask for the company name and address and say you will only communicate through the mail, and then hang up. Always get professional help from an attorney who can help you understand the collections laws in your state and help you navigate wise options.

To sum up, the problem with debt is that it puts unnecessary strain on your finances that keeps you from making positive progress, such as building an emergency fund, investing for the future, and reaching your financial goals.

Never go into debt for anything that doesn’t give you a return—like consumer goods, dining out, or fancy vacations. Financing those types of purchases, especially on a high-interest credit card, causes you to lose wealth instead of to build it.

So, if you’re wondering if you have a debt problem, you probably do. Lenders are usually willing to dole out more debt than you should have. Setting limits is your responsibility.

The good news is that if you recognize these warning signs, it’s never too late to turn around your finances, pull yourself out of a debt hole, and make better choices.

To create your get-out-of-debt plan and follow proven strategies to eliminate all types of debt, enroll in  Laura's super affordable online course Get Out of Debt Fast--A Proven Plan to Stay Debt-Free Forever and get started today.

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Red Danger Flag image courtesy of Shutterstock


About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.