10 Signs You Have Too Much Debt

How to Know If Your Debt is Too Much

If you're questioning whether you have too much debt, there's a very good chance you do. Having too much debt can lead to other financial problems like not being able to save money, missing bill payments, and having to borrow more money just to stay afloat. Here are a few signs you have more debt than you can handle.

You don't know how much you owe.

A man is drowning in bills
© Claus Christensen / The Image Bank / Getty

Hiding from your debt doesn’t make it go away. In fact, if you’re purposely ignoring your debt, you may suspect that you have more debt than you can handle and you’re simply afraid to face up to it. Stop running. Pull your most recent account statement from your creditors to make a list of your debts so you can confront what you owe and make a plan to deal with it.

You pay your bills late because you don't have any money.

If your debt payments are more than you can afford to pay each month, you definitely have too much debt. Unfortunately, paying late only makes your debt problems worse because you now have to deal with late payments and higher interest charges. Look closely at your monthly spending to figure out what you can eliminate to better afford your bills.

You don't answer the phone because it might be bill collectors.

When debt collectors start calling you, your debts have become delinquent and probably unaffordable. You may be able avoid debt collector phone calls for awhile, but don’t underestimate your creditors and debt collectors – they may decide to sue you for what you owe. If the creditor wins the lawsuit, they may be able to get court permission to garnish your wages or levy your bank account.

You've borrowed money to pay your bills.

If you have to pay your bills with loans from family, friends, credit cards, or cash advance places, you have too much debt. You'll eventually run out of places to borrow money and you'll have to face the debt you've accumulated with your creditors and your loved ones.

Reducing your bills or increasing your income will make it easier to afford your expenses without having to borrow money.

Your finances cause you to lose sleep.

Are you so worried about your bills that you can’t sleep at night? Do you toss and turn fretfully wondering how you’re going to pay the bills? That’s a sure sign that your debt has gotten out of control. Debt-related stress can lead to other medical problems. Making a plan to deal with your debt can eliminate stress and in some cases, literally save your life.

Your finances affect your work performance.

When your financial woes spill into the workplace, it’s time to do things differently. Losing your job is the last thing you need right now because a loss in income could put you over the financial edge.

You've drained your savings.

The absence of savings itself doesn’t always mean you have more debt than you can handle. If you drained your savings trying to pay off your debt or to make ends meet, that’s when you know there’s a problem.

You turn to drugs or alcohol to escape the stress of your debt.

Many people use drugs and alcohol to avoid facing up to their debt. The high cost of drugs may have even contributed to your debt. Getting treatment for substance abuse will be one of the first steps you have to take if you want to get out of debt for good.

You can't afford living expenses without a credit card or loan.

When you have to buy groceries with a credit card, it’s a sign of a deeper issue – you don’t have enough money to sustain your lifestyle. You may not make enough money at all or you could be mishandling the money you are making. Either way, you have to figure out how to survive on the income you make or increase your income.

You hide your spending from loved ones.

Ask yourself why you feel the need to hide your spending and the answer will probably because you know they will not approve. If you can’t be honest with your loved ones about your debt, chances are you have too much of it. You may even hide it because you’re afraid they’ll stop you from spending, which might be a sign of that you’re addicted to debt.