Warning Signs of Insolvency

A person is deemed to be insolvent if he or she is not meeting financial obligations generally as they become due. Therefore, it is important to recognize the danger signals. If the following scenarios are familiar to you, then you have a debt problem or are heading for one.

• you are always borrowing money to make ends meet from one payday to the next
• you pay only interest or service charges monthly without reducing any principal on your debt
• utility companies cut off service because of outstanding bills
• there is a garnishee on your wages to pay for debts owing
• you continually go over your spending limit or use your credit cards as a necessity rather than a convenience, or
• creditors harass you for payment, or hire a collection agency to recover the money for them. They may also threaten to sue or repossess your furniture, car, or other pledged assets.