Published on March 8th, 2011 | by Pete0
Just In Debt or in Debt Crisis?
If you’ve taken the brave step of admitting to yourself that you have debt problems, the next question is just how serious are your debt problems? There is more than one way of managing and resolving debt, but the path you choose will be dependent on whether you are in ‘debt crisis’ or not. So how might we define ‘debt crisis’? If you think that either of the following statements applies to you, this could suggest that you have reached debt crisis:
- I struggle to make all of my minimum payments on my debts and cover all of my basic outgoings (such as mortgage/rent, energy bills and food etc.)
- My debts (not including mortgage) are larger than a year’s income (after tax).
If either of the statements are true for you, than it may be the case that you are either currently in debt crisis, or are heading that way if you are not careful in how you respond to the situation. As for me, the second statement applies, but as I can make my repayments, and cover the rest of my outgoings I would not say I am in debt crisis. However, if I fell off track and abandoned my efforts to repay my debt and started wasting money again, then I would absolutely say it would only be a matter of time before I find myself embroiled in debt crisis.
This is not a particularly fun post to read (or to write for that matter) but it poses a vital question; what is the level of your debt and how bigger problem is it? This question needs to be answered before you can identify the best route to resolve the problem. How would you answer the post title………?