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You may think it is natural to have a lot of credit card debt and other bills. That’s because it is not uncommon for many Americans to juggle multiple credit cards, mortgage loans, auto loans and other debt on middle class incomes. It can become easy to buy into the notion that “you’ll always have a car loan” or “you have to borrow money to get ahead,” among other myths.

Take a look at these 5 warning signs to see if you have too much debt:

1. You think about your credit card debt and other bills constantly. Do you have trouble focusing on your job or other tasks because debt woes are always at the forefront of your mind? Getting help with debt can help relieve some of the stress and allow you to make progress on a debt reduction plan. Look for a reputable debt counseling firm that can help.
2. It’s getting more difficult to make the minimum monthly payment on your bills. Being unable to make the minimum payments will result in late fees and probably an interest rate increase to the default rate. It will also keep you from making much progress in paying off your balance.
3. You are frequently late with bill payments. Part of what goes into determining your credit score is whether or not you are on time with monthly payments. Pay close attention to the deadlines for getting your payments to creditors. Being even an hour late will have negative repercussions.
4. You have just about maxxed out credit cards. Are you using credit to buy groceries, gas and other necessities because your income just doesn’t stretch? Wracking up credit card debt this way is a losing proposition no matter how you look at it.
5. You are afraid to total up your debt. Knowledge is power, so equip yourself with the information you need to make progress on a debt reduction plan. As shocking as your debt total may be, you need to know it to get moving in the right direction.

Get help with debt

Once you admit that you have a debt problem, commit to get help. Depending upon your situation a debt consolidation or debt settlement could help. Talk with a debt counselor to rind the right approach to your money woes.

Question by Maximo: I have a loan secured on my car that I can no longer pay – why won’t they take it as payment?
I have a loan secured against my car that I can no longer pay. I have offered for the creditor to take the car as payment for the loan but they refuse. Plus, I can’t sell the car to get them the money to pay them because they hold the title – are they allowed to do this?

Your car is collateral for the loan, which means only that they have the option of repossessing it to recover money lent to you, not that they are obligated to repossess it. The bottom line is that you owe the balance on your own. Not the balance on your loan or value of the car whichever is less. They would rather not take your car because then they have to go to the expense of paying someone to repossess it, store it, and sell it.

You can still sell the car even if they are holding the title, but in order to get the lien released to transfer title, you have to settle up with them in full. So they will only prevent the sale if you can’t pay the entire balance with the proceeds.

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In Massachusetts, distressed homeowners are waiting around for the time when their lenders ask them to vacate their homes. This is expected since most are no longer paying their mortgage dues for several months now and are simply hoping that credit repair services will help them minimize the damage to their credit scores.

The number of Boston foreclosures has soared in the past couple of months. In fact, about 36,000 homeowners have not paid their mortgages for at least 3 months, and 30 percent of them are actually behind by a year or even more, based on a report from the Lender Processing Services Inc.

There are several reasons why the number of Massachusetts foreclosures is rising at an alarming rate. For starters, many borrowers have lost their jobs and have no way of paying their mortgage obligations. Some of them are simply having trouble with the ballooning interest and could no longer afford to pay the loan.

There are still those who are looking to get out of such mess by speaking with their lender and discussing foreclosure alternatives, such as loan modification or short sale. These people are the ones who are also looking at credit repair services in the hope that their delinquency will not greatly affect their credit scores and allow them to enjoy financial credibility.

On the other hand, there is a growing number of borrowers who have decided to give up and stop payments on their homes, but still live in these, waiting for the lender to complete the foreclosure process. They use the time to save the money instead, so they could move to an apartment when the time comes. In addition, they will not be dragging down home prices in their neighborhoods since abandoned properties are considered to be neighborhood blights even if they are looked at by buyers as cheap houses for sale.

The timeframe for lenders to foreclose a property has essentially gotten longer with lenders being required to help these troubled homeowners first. For some experts, the delay is causing a drag on the housing market and the industry needs to determine which borrower will benefit from such help and which are really no longer able to pay for their home. For the latter, they should concentrate on looking for credit repair services so that, in a couple of years, they can become credit-worthy enough to buy a new home.

I wrote blog posts in this blog and on my asset protection blog about Florida court decision finding that a debtor’s IRA inherited from another family member, excluding spouses’ rollover, was not exempt from the debtor’s creditors because the IRA represented an inheritance rather than the debtor’s own retirement savings.

Florida statute section 222.21 will be amended to specifically included inherited IRAs as well as rollover IRAs. You can read the bill here. The bill is retroactive so it does not matter if the IRA was established or inherited before this bill becomes law. Also, the bill is applicable to IRAs owned by Florida residents even if the deceased owner lived elsewhere.

I do not see many bankruptcy debtors with inherited IRAs. Come to think of it, I cannot recall any bankruptcy trustee asking my client whether the IRA on their bankruptcy schedules was their own IRA or was an inherited IRA. I am sure that there are a few bankruptcy cases where a trustee has challenged the exemption of the debtor’s IRA because it was inherited. If you are one of those debtors you should tell your attorney about this new law and make sure the law (remember, its retroactive) saves your inherited IRA from your bankruptcy trustee.

Don’t expect the government to let you get away with not paying your tax bill. As many high-profile cases involving celebrities such as Wesley Snipes and Al Pacino and have shown, the Internal Revenue Service (IRS) expects to get paid no matter what your sob story may be. If you don’t set up some type of payment plan with Uncle Sam, don’t be surprised if the situation escalates into an IRS wage garnishment.

What is wage garnishment?

The government can legally deduct a portion of your wages–up to 25 percent–to pay back what you owe. A wage garnishment usually results after repeated warnings and letters about unpaid tax debt. The IRS would rather work with you to set up some other type of agreement for paying your tax bill, so do whatever you can to avoid having a levy placed on your paychecks.

The biggest problem with wage garnishment is that you are likely to struggle even more to pay household bills and other expenses. If you are already having a tough time financially, you may end up in the position of having to take on a second job to boost your income.

Get help with debt

If things have really spiraled out of control and you have a big tax bill and other financial obligations hanging over your head, it’s probably time to get help with debt. A debt counseling firm may be able to help put together a debt reduction plan to get you moving in the right direction. A debt counselor may also be able to help you navigate the IRS system for setting up some type of payment plan.

If you have already received a wage garnishment, consider finding a knowledgeable tax attorney. The attorney may be able to help you get a wage garnishment released or set up some type of installment agreement to pay back what you owe.

How to mess up a bankruptcy exemption. I happened upon a Florida bankruptcy case decided in 2010 wherein a court held that a debtor’s self-directed IRA was not exempt. The debtor’s had a securities account that clearly was titled as an IRA account. The IRS approved the securities account as a proper self-directed IRA account as to its form. The problem was that our debtor used his IRA money improperly and in violation of IRS rules for self-directed IRAs. The debtor borrowed money from the IRA, pledged his IRA account as security for a loan, and commingled IRA funds with his other money. The debtor’s misuse of the IRA disqualified the IRA under IRS regulations. Even though the IRS had not investigated or independently disqualified the IRA the bankruptcy court held that the money in this debtor’s IRA lost its exemption.

The court pointed out that a bankruptcy court may reach an independent decision regarding the qualification of a debtor’s IRA when the IRS had not considered the debtors abuse of plan assets or audited the IRA’s operations. A debtor may forfeit his IRA exemption if he uses IRA funds in violation of IRA rules. If it looks like duck and is called a duck it is not a duck if it does not quack. Relax debtors- I have never seen a bankruptcy trustee investigate how a debtor managed his self-directed IRA. The case is 2010 WL 1408343.