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Are You In A Debt Trap?


Credit, like whiskey is great in the appropriate quantities, but too much and too often could spell disaster. By the time you realise this, you may already be inside the infamous debt trap, unable to make the necessary payments and bleeding money in interest.


If you haven’t kept an eye on your respective expenditure, income sources and your level of debt, it is highly possible that you may landed up in a financial mess.


Here are some signs that you have fallen into the debt trap;


YOUR MINIMUM PAYMENTS ARE MORE THAN 40% OF YOUR SALARY

If you add up all of the minimum payments of your unsecured debts and it is 40% of your income or larger, you have too much debt. Exceeding 35-40% of your income risks not enough income to cover your housing, food transportation, and other necessities.


YOU’RE ONLY MAKING MINIMUM PAYMENTS

No matter what your debt levels, only making minimum payments is a problem. Even if your debt isn’t that large, you could spend decades paying it off if you only pay the minimum required monthly payment.


YOU HAVE DEBTS IN COLLECTION

If debt collectors have started hounding you over unpaid bills, then your debts have definitely grown out of control. Since your debt is in collections, this means you’ve fallen behind and failed to keep up with your monthly payments. Your credit score will start feeling the effects of your default rather quickly at this point, and you need to find a way out.


PAYING ONE DEBT WITH ANOTHER

If you’re transferring balances from one card to another to stay afloat, or refinancing your house to pay down revolving debts, you have a debt problem.

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Freeze Debt Ltd is registered in England and Wales. Registered Number 11842271. Incorporated in England and Wales, with company number 11842271 and having its registered office at Ambler House, Trevelyan Square, Leeds LS1 6ED.  Freeze Debt Ltd is an Appointed Representative of Blackberry Finance Limited. Our Firm Reference Number is 840092. You can check these details on the register: https://register.fca.org.uk.

Jason Peter Bowen is Authorised to Act as an Insolvency Practitioner, in the UK, by the Insolvency Practitioners Association, IP Number 22150. All Insolvency services are provided in partnership with The Debt Resolution Service. The Debt Resolution Service is registered in England and Wales. Registered Number12692223 and having its registered office at Mills Hill Works, Corbrook Road, Chadderton, Oldham, OL9 9SD.

 

Freeze Debt provides insolvency solutions to individuals throughout the UK. 

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