You should never get into a panic over debt. However, there are times when you may want to show some concern and start taking measures to alleviate it. Here are a few signs that you may have a debt problem that needs addressing.

1. Over 50% of your income is spent on consumer debts

If half of your income is going towards paying off debts, you’re likely to be finding it difficult to keep up with payments. In fact, you could find yourself missing payments and accumulating more debts in arrears.

Ideally, you should spend no more than 20% of your income on consumer debts. This includes car loans, personal loans, credit cards, and mortgages. Reducing a lot of debt isn’t easy and you may want to look into professional debt support services such as Debt to Success System. Alternatively, you may be able to contact creditors individually and ask about reducing debt.

when should you worry about debt

2. You borrow to pay off other debts

Paying off debts with extra loans is a vicious cycle. In many cases, you won’t be solving the problem. In fact, if you’re paying off high-interest payday loans with other higher interest payday loans, you could be making the problem worse.

Unless you’re refinancing debt to lower interest rates or consolidating debt, there’s generally no reason to pay off a debt with borrowed money.

3. You live in your overdraft

When you’re in your overdraft, you’re borrowing money from the bank that you don’t have. On top of this, many banks will charge you for it. As a result, you don’t want to be in an overdraft for too long.

Getting out of an overdraft isn’t easy – especially if it’s a deep overdraft. Make efforts to cut back on your spending so that you can climb out. Once you’re out, consider reducing your overdraft or getting rid of it completely to avoid the temptation of spending money you don’t have. The same applies to lines of credit.

4. Debt collectors are chasing you down

If debt collectors are chasing you down, it means that you haven’t been paying your debts. This is definitely a time to worry about your debts. Fortunately, there are many options for dealing with debts when they reach this stage.

There are many debt support services that can help you negotiate debt payments with collectors, as well as helping you to understand your rights. In many cases, when you haven’t got available funds, payment plans can be arranged. Ignoring debt collectors is never the way to go and will likely make the problem worse.

5. You’ve been rejected by lenders

If you borrow a lot of money and fail to make debt repayments on time, you could find that lenders start refusing your loan applications. This is because you’re likely to have a low credit score or you’ve possibly been blacklisted.

It’s possible to rebuild a credit score and start getting accepted by lenders again as this guide at Nerdwallet explains. Usually, however, it’s a wise idea to deal with any existing debts before taking on any new ones.