When to Ask for Debt Relief Help

Key Takeaways
  • Anyone can face financial distress when financial circumstances change.
  • You do not have to wait until you are financially desperate to ask for help through a debt relief company.
  • The earlier you seek out help, the more options you will have.

Financial distress does not discriminate by age, level of education, or income. Instead, it is often brought on by unforeseen circumstances that strain your finances for an extended period of time. For example, a job loss or healthcare emergency can mean months or even years of living in survival mode. It is not uncommon to use credit cards, personal loans, and other forms of debt to stay afloat during this time.

But how long should you remain in financial duress before seeking debt relief? When do you know you have too much debt? Is it after a company takes you to court and receives a judgment or the first time you make a late payment?

There are different levels of financial hardship and deciding when to ask for help will influence the best debt relief route for you. In nearly all cases, the earlier you ask for assistance, the more choices you will have.

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If you face any of the circumstances below, it might be time to get help from a debt relief provider.

Minimum debt payments plus expenses exceed income: When you spend more than you make, you must use debt to bridge the gap. However, the practice is unsustainable and will eventually lead to bankruptcy if you don’t’ rectify the situation. Ideally, you always want to earn enough to pay all your bills, plus a little extra to set aside for a rainy day.

You charge essential purchases like food or medications every month: Using credit to pay for necessities is an indication that you are spending more than you make. To resolve the gap, rigorously gauge spending and find ways to lower costs. Next,locatecreative ways to increase your income. If those two exercises do not resolve the crisis, it is time to reach out for help.

You have lost income: When 63% of Americans live paycheck to paycheck, a reduction in income can quickly lead to a financial crisis. If you have lost wages, face reduced hours, or lost your job, immediately resort to emergency budget mode. Eliminate all but the essential expenses and seek ways to make up for the lost wages. Short of cutting costs and increasing income, you will quickly burn through savings, leaving you reliant on credit to pay monthly bills. Ask for help immediately if you are unable to balance your family budget.

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Cutting expenses is not enough to fix the budget problem: Stripping down costs to the bare minimum is a good way to manage a short-term emergency. However, it is not a long-term solution because it is unsustainable. If you live with an emergency budget that leaves no room for error, any financial need can become a financial crisis. Therefore, it is sometimes necessary to ask for help even if you have not missed any payments.

Where to Find Relief When You Have Too Much Debt

Debt settlement can immediately lower monthly costs while providing long-term debt relief. A debt counselor will help you assess your financial situation and make recommendations on how to solve your financial distress. For example, you might qualify to pay less than the amount owed on credit cards, personal loans, and other unsecured accounts, immediately lowering monthly costs and eliminating debts in as little as three years.

  • What are signs that I have too much debt?

    The number one sign of too much debt is earning less than you spend. If you cannot rectify your finances but cutting costs or increasing income, you may need to seek help through a professional debt relief company.

  • How much debt does the average person have?

    The average mortgage is $208,185. The average consumer debt, including credit card bills, personal loans, and auto loans, is $41,476.

  • Where can I find help to pay off my debt?

    Debt relief options include debt consolidation loans, credit counseling, debt settlement, and bankruptcy. Your best option will depend on your level of indebtedness and the current state of your finances.