07 Apr 5 Signs You Need Debt Rescue (And What to Do About It)
Debt can sneak up on you and cause more than mere financial stress. In fact, it can affect nearly every aspect of your life once it spirals out of control. You might be under constant financial strain, living paycheck to paycheck and suffering exorbitant interest (particularly with credit cards and payday loans). If an unexpected expense comes up, such as a medical bill or a repair bill, you’ll likely have to sink deeper into debt to afford it.
Besides financial implications, debt can also deeply strain your mental health. Debt-related stress can take an enormous toll on you, exacerbating – or even causing – conditions like anxiety and depression. Debt can also be one of the reasons why some couples split up, especially if they are married in community of property.
Additionally, debt can have legal implications. Missed payments can result in section 129 notices, court summons, garnishee orders, and even involuntary administration or sequestration orders. Missed payments and defaults tank your credit score, making qualifying for loans and passing affordability assessments just about impossible.
What can you do about needing debt rescue, and what are the signs to look for? In this post, True North Debt will outline five signs you need debt rescue and explain what you should do about it.
Let’s dive in!
Five Signs You Need Rescuing from Debt
The five signs you need rescuing from debt include:
- Only making minimum payments
- Reliance on credit to pay for essentials
- Debt is affecting your mental health
- You’re borrowing to pay other creditors
- Your credit score dropping
Let’s discuss each of these signs in further detail.
Only Making Minimum Payments
Only making your 5% minimum payment is a blaring siren that you need help escaping from the debt trap. Making minimum payments doesn’t lower your principal. You’re likely only paying off the interest you’ve accrued on your balance.
Interest piling up while your balance doesn’t budge is a sign you need professional help, such as that of True North Debt’s.
Relying on Credit to Pay for Essentials
Using credit to pay for essentials like petrol, groceries, electricity, and more is a sign you’re in grave financial distress. If you can’t afford the basics, you should seriously reconsider your finances.
Debt Is Affecting Your Mental Health
When worries about debt become unmanageable – you can’t sleep at night, they’re causing arguments, or you’re just…stressed – it’s time to consider reconfiguring your finances or reaching out for help.
You’re Borrowing from One Credit Facility to Pay Another
If you’re using one credit card to pay off another or taking out payday loans to pay off personal loan instalments, you’re very likely too far gone into the debt spiral and need debt help as soon as possible.
Your Credit Score Is Dropping
Credit scores drop when your credit utilisation rates are too high, an account is listed as in collection, you miss a payment, or you default on a payment.
What to Do If You Need Debt Rescue
If you meet any one of the five signs, it’s time to get help with debt. But what debt help system can you use that protects our assets, protects you from legal action from creditors, reduces your interest rates, cuts your repayments, and gives you more time to pay your debts?
Debt review, or debt counselling, is a government initiative that was established in 2005 under the National Credit Act. Under debt review, a debt counsellor negotiates with your creditors to lessen what you pay on debt. Once you’re under debt review, creditors may not take legal action against you, including seizing your assets.
True North Debt’s team of expert debt counsellors can effortlessly craft a custom repayment plan to help you break free of debt. To learn more, contact us today.