What Are The Most Common Causes Of Debt?

None of us are immune to the misery of financial problems and debt, particularly in these challenging times and even the most careful of people can be struck down by an unexpected disaster, causing their finances to spiral out of control.  But aside from rampant spending or an addiction to illegal substances, what else can cause the average person to sink into out of control debt?


Loss of employment is a common cause of debt problems.  We all need income to pay for the everyday necessities, from food to heating, so when our primary source of income is removed, debt often accumulates.  Claiming benefits can provide some income if you have lost your job, but if you have a mortgage to pay and an expensive lifestyle to support, it won’t be long before you are in debt.

Serious or Long-Term Illness

Catching a cold or a virus is mostly an inconvenience, but if an illness or health condition is serious or lasts for more than a few weeks, it will affect your ability to earn money.  Unfortunately, being diagnosed with a serious or long term health problem is often a precursor to ending up out of work, so not only do you have to cope with being ill; you also have to cope with having no money.

An Addiction to Gambling or Shopping

There is nothing wrong with buying the occasional lottery scratch card or a few pairs of shoes here and there, but if you spend your life inside the local bookmakers or shopping online, you have a problem.  Sadly this type of problem is likely to lead to financial meltdown, which will require you to seek debt help around the same time as you pay a visit to your doctor to request counselling.

Bad Luck

Nobody can predict the bad times.  Perhaps your car died and you had to buy a new one for work, which entailed taking out a loan, and because you had poor credit history you ended up paying over the odds for finance, which in turn led you into even more debt when you struggled to make the repayments.

The Cost of Further Education

These days, further education is an expensive option, so if you choose to spend three or more years at university in the pursuit of a degree or post graduate qualification, you can look forward to a millstone of debt hanging around your neck for decades.

Poor Financial Planning

Even when no other external factors are involved, some people are just so bad at managing their money, debt is almost inevitable.

4 Signs Debt is a Problem

  • You have reached the limit on all of your credit cards
  • The bank won’t extend your overdraft
  • Debt collection agencies are calling you up
  • You can’t meet the minimum repayments on your loans

How to Cope with Debt

Once your finances are in a downward spiral, it is essential that you seek debt help.  Ignoring the debt will not make it go away, so rather than shoving your unpaid bills in the bin and refusing the answer the door because you are being pursued by debt collection agencies, it is sensible to ask for debt help and guidance from a qualified debt counsellor.

What Can a Debt Counsellor Do?

A debt counsellor is not a Fairy Godmother, but they are trained to provide debt help services.  They can talk to creditors on your behalf, organise debt restructuring plans and generally offer guidance and counselling services.  In many cases, once the debt has been restructured, often by way of a consolidation loan, the repayments are significantly reduced and the debt becomes a lot more manageable.  But unless you seek help in the first place, your problems are unlikely to go away.

Katie Latchford is a writer who understands that students are likely to accrue a huge amount of debt once they have completed their studies. Therefore she recommends that if you are struggling financially, then seeking debt help might help improve your financial situation.

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