Are you in financial trouble?

Sometimes debts can build up to the point that they're overwhelming. Here's how to spot the danger signs of financial trouble and a debt spiral, so that you can get help if needed.

Girl resting head on table surrounded by bills, wallet and calculator

Owing money and paying bills can be stressful

Missing more than one repayment

It’s easy to forget to make a payment, or have temporary cash flow problems. But miss two or more payments in a row, and the people who lent you the money in the first place will start getting worried.

Friendly ‘loans’

You may find yourself borrowing money from friends or family, saying it’s a temporary thing. On some level you doubt you’ll ever pay it back.

Not opening bills

If you can’t pay all of that scary bill, you may be able to at least pay a little of it. Utilities providers often have reasonable repayment plans if you’re struggling. But you have to ask for help to qualify for these schemes. Avoiding contact with your creditors (the people you owe money to) isn’t a good tactic, and makes them suspect you won’t pay, rather than can’t pay. It won’t go away if you cover your eyes.

Big repayments

If you’re paying out 20%, say, of your money every month on repayments that means you’re going to feel the pinch. It’s a large proportion of your income, and you will genuinely feel like you’re struggling. One slip-up, and it will be hard to find the money for the next instalment. Make sure you’re not paying too much interest on your borrowing.

Debts staying the same

If you’re paying off as much as you can each month, but your debts are not getting any smaller, this is a danger sign. You are in a vulnerable situation here, and can probably only afford to pay off the interest, rather than reduce what you owe.

Things getting nasty

Whoever you owe money to will eventually take steps to get it back. You could end up being taken to court, and if you have a county court judgement (CCJ) against you it will affect your credit rating for years, especially if you can’t settle the fine within 30 days.

You may also get a visit from the bailiffs, who may take away enough of your personal possessions to sell to cover what you owe. If you have hire-purchase agreements, the creditors may simply take back your car or musical equipment, which could cause serious problems if it’s your livelihood.

Photo of girl in debt by Shutterstock

Next Steps

  • StepChange offers free advice on your debt problems, basing it round what's right for you. 0800 138 1111
  • Chat about this subject on our Discussion Boards.
  • Need help but confused where to go locally? Download our StepFinder iPhone app to find local support services quickly.


Updated on 29-Sep-2015