Debt limit calculations

The monthly disposable income guideline says that spending more than 20% of disposable (net) monthly income on consumer debt repayment is a sign of financial difficulty.  If the family is larger than average, or the income is smaller than average, or the family wants are quite high, the 20% guideline is a sign of grave financial difficulty.

Recognizing the danger signals   

You may have a debt problem if:

  • your wages have been garnished or you are using a payroll loan or cash advance company to borrow money.
  • you are only able to pay the interest and the service charges on your debt.
  • you are always borrowing money to make it from payday to payday, perhaps from family and friends and then find yourself avoiding them because you cannot afford to repay the loan. 
  • creditors are pressuring you and threatening to sue.  You have received notification in the mail from a collection agency.
  • some of your services have been cut off such as hydro or telephone.  
  • stressful situations can be created in your home life due to a lack of available finances.