How you know when you are in debt...

...and how to get out of it.

Everyone has a bad week here and there. When you lose track of what you have spent your money on and all of a sudden, you find yourself short.

If you are on top of your finances, you would have an emergency fund to fall back on until you find your feet.

But sometimes those bad weeks just keep coming, there is no emergency fund to speak of and you fall deeper and deeper into debt.

It's times like this, you could use a little help.

The best way to avoid falling into debt, is to identify the tell-tale signs of an impending insolvency.

1. You never seem to have enough money.

When you go to pay regular bills or purchase everday expenses, you never seem to have enough money available.

This is when you turn to things like credit cards and personal loans, which only makes your debt worse.

How to avoid it: Draw up a budget and monitor where your money is going.

Be sure you always have enough money put aside for your bills by cutting back on unnesesary purchases, like expensive takeaway or a trip to the cinemas.

2. You have several credit cards and personal loans in your name.

Borrowing money from the bank is easy and takes the pressure off your financial situation...for the time being.

But several credit cards and loans can get out of control and you are losing a lot of money paying interest and fees on each seperate account.

How to avoid it: To get all your loans down to a level you can cope with, you should consider consolidating your debts.

This will roll your repayments into a single regular repayment and leave you with only one set of interest. The catch with this is - you need to STOP using your credit cards.

3. You are more than a month behind on your loan repayments.

When it all becomes too much, it is sometimes easier to just ignore your debt in the hope it will go away.

Throwing your bills in the bin, ignoring your statements and wreckless spending will only add to your debt and make the situation worse.

How to avoid it: If you are weeks behind on your payments and you don't see a way of ever catching up, you can propose a Debt Agreement.

A Debt Agreement is negotiated by professionals to propose a new repyament schedule better suited to your situation. For more information on a Debt Agreement click here.

If you are having a problem with your debt, don't let it get out of control, no matter what stage you are in, there is always something you can do to get it under control.

For more help with debt visit www.debtrescue.com.au