How Do I Know If I Need Debt Management Help?

Do you ever find yourself wondering how you ended up so far in debt and with no idea how to get yourself out of it? Well, hindsight is indeed 20-20, and when it comes to financial matters, prevention is key. Credit counselors at Consumer Credit Counseling Services (CCCS) agencies like ours share advice with consumers to help them handle and correct debt management issues and learn strategies for avoiding problems before they occur. Recognizing the warning signs early on can help consumers to avoid the pitfalls of excessive debt and lead healthy financial lives.

Managing Debt Takes Strength

Nobody likes to admit when they need help with financial matters. Most of us think we can manage our debt and finances on our own. All too often this is not the case. Consumers realize too late that they could have used some help with their credit and debt issues. Just look at the most recently published numbers:

• In 2004, the American Bankruptcy Institute reported that over 1.5 million Americans filed for personal bankruptcy.
• Between 2001 and 2004, household total debt (median value) rose by 33.9% according to the Federal Reserve's Survey of Consumer Finances.
• The same source sites that between 2001and 2004 the proportion of families who carried credit card balances rose 1.8 percentage points to 46.2 percent.

This is why it is so important to recognize the warning signs early on and have a good debt management plan in place in case you run into unexpected issues.

Credit Counselors Share the Warning Signs

Sometimes debt is caused by life events that are out of our control. Other times, however, you might be making a bad situation even worse. Could you be contributing unwittingly to your debt management issues? Our Consumer Credit Counseling Services (CCCS) agency asks the following True or False questions:

• I can always pay more than the minimum monthly payment on my credit cards.
• Less than 20% of my monthly income is being used to pay debt on credit cards.
• I always pay my rent/mortgage in a timely manner.
• I am well below the credit limit on all of my credit cards.
• I have leftover income that I put toward savings every month.
• I pay off all of my existing debt before I take out a new loan.
• I rarely use credit cards to pay for daily purchases such as food or gasoline.

If you answered "False" to one or more of the questions above, you may benefit from the education and services that a professional consumer credit counseling services agency can offer. Everyone's situation is different, and has to be dealt with in an individual manner. Our Consumer Credit Counseling Services (CCCS) agency specialist can help you spot the trends and if necessary, provide you with a personalized debt management plan to help pay back the debt you have incurred.

Behaviors Contributing to Debt Management Problems

While some causes of debt are evident, such a medical expenses or divorce, sometimes the financial strife is caused by a behavior. Two of the main contributing factors to excessive debt that are caused by a behavioral issue are compulsive spending and compulsive gambling. These issues need to be identified and then addressed by a behavioral therapist. The financial implications can be handled by a professional Consumer Credit Counseling Services (CCCS) agency like ours which can help to deal with current debt management concerns as well as to teach good fiscal responsibility for the future.

Start Reversing the Debt Trend Today

There is a simple and helpful formula that can be used to help consumers identify where they stand financially. It is called the Debt-to-Income Ratio, and the formula works like this:

If the Debt-to-income ratio percentage is greater than 20%, it is a good idea to come up with a plan to manage your debt more effectively. Our Consumer Credit Counseling Services agency offers debt management plans to reduce the amount of debt to creditors and gain more control over your personal finances.

It is Never too Late to Get Help from a Consumer Credit Counseling Services Agency

Now that you know what the warning sings are, it is time to do something about it. Don't wait for your debt situation to get any worse. Help is out there. As a non-profit Consumer Credit Counseling Services agency with over 25 years of experience, we can help you reverse those negative trends and educate you on effective budgeting techniques. If needed, one of our consumer credit counseling services experts can also provide you with a personalized debt management plan, to reduce your credit debt and get you back on track to a healthy financial life.