With prices rising due to increased fuel costs plus the problems with housing loans, once again, more and more people are facing difficult times, living from paycheck to paycheck, and running into problems with their debts. Some of these may well be temporary setbacks. However, these temporary situations can become damaging if the reality and seriousness of the problem is ignored. The first step in making a recovery is understanding the problem.
What are some of the warning signs of a serious debt problem?
Your Home is Threatened
If you rent and the landlord is starting the eviction process or if you have a mortgage the holder of it has sent you a foreclosure notice this is perhaps the biggest warning sign and requires immediate action. There are several approaches you can take, ranging from working out an agreement to bring payments current to bankruptcy. Which will work best depends on your situation but don’t hesitate to seek legal help if you need it. It can make the difference between preserving what you own and being out on the streets with nothing.
Creditors Filing Suit
When creditors begin filing suit to garnish your wages or to seize your property this is another major indicator of credit problems. Hopefully, you won’t let things go this far but many people do and some creditors just do this to "play hard ball" from the start. Once again the exact answer depends on the specifics of your situation but getting legal help is certainly a good step. You don’t want to try to defend yourself in court.
The IRS or State Tax Authorities Start Legal Action
These guys don’t play around. Unlike regular creditors who can only seize a small percentage of your paycheck in most states, they can seize the whole thing, leaving you with nothing to live on. If you have savings they can go after this too. It can be a bad situation so at the first indication of this kind of trouble seek legal assistance.
The important thing, as you can see, is to seek help before the situation gets out of hand. I found myself in this situation a few years ago at the end of the DotCom boom. However, seeking good legal and financial advice helped turn things around. If today’s tough times are putting a strain on you, take time to evaluate your situation and seek the level of help that you need.