5 Warning Signs You Have Too Much Debt

Written By Naazma Garcia
Aug 24, 2022


Debt can be a wonderful thing. Many of us don’t have lump sums of cash lying around to purchase cars, houses, or even groceries. Borrowing money allows us to make purchases in smaller increments over time. 

The only problem? Sometimes, we get carried away or we are confronted with an unexpected financial emergency, and our debt spirals out of control. So, how much debt is too much debt? Here are 5 warning signs. 

1. Your Debt-to-Income Ratio is too High

Debt-to-income ratio (DTI) compares your total monthly debt payments to your monthly income (i.e. before taxes). Therefore, to calculate DTI, divide your monthly debt payment by your gross monthly income. 

For example, if you pay $2,000 a month for your mortgage, $200 a month for an auto loan, and $300 a month to pay off your other debts, your total monthly debt payment is $2,500. If your gross monthly income is $5,000, then your debt-to-income ratio is 50% (2,500 divided by 5,000 equals 0.5). 

The Consumer Financial Protection Bureau recommends that homeowners maintain a DTI for all debts of 36% or less (including your home mortgage) and between 15-20% for renters. Generally, a DTI of over 43% will disqualify you from obtaining a mortgage.  

If your DTI is over 36%, you should create an action plan to start paying off your debts more aggressively. 

2. You Can Only Afford Minimum Payments 

Many debtors opt to auto-pay their minimum payments and forget about paying their remaining balance. This means that you are taking longer to pay off your debt and paying more in interest over time. 

Start tackling your credit card debt by focusing on the smallest loans first and working your way up (snowball method) or focus on those debts with the highest interest rates first and work your way down (avalanche method).

If you simply can’t afford more than your minimum payment, then it may be time to consider debt resolution by contacting a debt relief company (more on that later). 

3. You Don’t Have any Savings

Borrowers often have to siphon funds from their savings to pay off their debt. Without some kind of cash account to fall back on, you are forced to use credit for minor expenses and sudden emergencies. 

This precarious financial situation means that you are always one fender bender away from landing yourself in a pit of debt requiring outside help to escape. Consider the lack of a cash buffer or a dwindling savings account as a warning that you have a dangerous amount of debt. 

4. Your Collectors Won’t Stop Calling

Perhaps the only thing more irritating than getting calls from scammers is answering your phone only to hear a debt collector on the other end. The more debts you owe, the more calls you may receive, and the more pressure you will feel to make payments you simply can’t afford.

If a collector calls you, realize that you are under no obligation to speak to them if you are busy. Furthermore, don’t agree to pay or admit to the debt before confirming that the amount is accurate and the debt is yours. Finally, you don’t need to give information about your income, debts, or other bills, and you can simply hang up if you want.   

5. You Can’t Pay Back Friends and Family

Borrowing cash from our friends and family typically doesn’t come with interest charges. However, as you get further into debt and become more reliant on asking your loved ones to spot you, you will eventually run out of people to ask for help and resentment will build.

That’s when you know it’s time to ask for outside help.  

Help for Those With Too Much Debt

If the above warning signs sound familiar to you and you feel like you are up against a wall, it may be time to reach out to a debt relief company. A good debt relief company will handle your creditors and help you build a strategy to get your debt under control. 

Trust and experience are what make a good debt settlement company. Americor has relieved $2 billion dollars in debt over 30 states. They are fully accredited by the Better Business Bureau (BBB), the American Fair Credit Council (AFCC), and the International Association of Professional Debt Arbitrators (IAPDA). With over 400 employees Americor can tailor the optimal solution to your situation and help you navigate these uncertain financial times. 

Determine if you qualify for debt settlement, get a free debt analysis to determine if debt settlement is viable, and receive credit counseling by talking to a certified debt consultant today.  

Click here to apply: https://apply.americor.com/new 

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Americor provides debt solutions to thousands individuals and families all over the country. We’re a next-generation debt relief company with a proprietary platform designed to help clients get out of debt quickly. Together we’ll develop a strategy for you to enjoy a debt free lifestyle. Learn more about how Americor can help relieve the burdens of debt today.

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We provide debt resolution services. Our clients who make all monthly program payments save approximately 40 – 50% of their enrolled debt (average of 43%) upon successful program completion, before program fees. Fees are based on a percentage of your enrolled debt at the time of starting the program and range from 15%-25% of your enrolled debt. Programs range from 20-48 months. Clients must save at least 25% of each debt due to an enrolled creditor before a bona fide settlement offer will be made. On average, clients receive their first settlement within 4-7 months of enrollment and approximately every 3-6 months thereafter from when the prior debt was settled. Not all Clients complete the program. Estimates are based on prior results and may not match your results. We cannot guarantee that your debts will be resolved for a specific amount or percentage or within a specific timeframe. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting, legal advice or credit repair services. Our program is not available in all states; fees may vary by state. Some programs may be offered through The Law Firm of Higbee & Associates d/b/a Advantage Law. The use of debt resolution services will likely adversely affect your credit. You may be subject to collections or lawsuits by creditors or collectors. Your outstanding debt may increase from the accrual of fees and interest. Any amount of debt forgiven by your creditors may be subject to income tax. Clients may withdraw from the program at any time without penalty and receive all funds from their dedicated account, other than funds earned by the company or fees paid to third-party service providers, as may be applicable. Read and understand all program materials prior to enrolling. Certain types of debts are not eligible for enrollment. Some creditors are not eligible for enrollment because they do not negotiate with debt relief companies. To determine the offers you may be eligible for, Americor conducts a “soft credit pull.” This credit pull does not impact your credit score, creditworthiness, or ability to obtain credit from other sources. The soft pull is not a tradeline entry, it does not report against your score and will only take a few minutes.

Americor Funding, LLC (18200 Von Karman Ave, 6th Floor Irvine, CA 92612) is fully accredited by the Better Business Bureau (BBB), the American Fair Credit Council (AFCC), and the International Association of Professional Debt Arbitrators (IAPDA). CA Department of Financial Protection and Innovation (DFPI) License # 603K913.

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