Everyone has a point of no return or tipping point, when you know you’ll never be able to pay off your debts. Once you pass that point, the only way to get out of debt is to file for bankruptcy. The problem is, no one wants to file for bankruptcy, so often, even after they’ve passed the tipping point, they’ll put it off as long as possible, often waiting until they’re up against foreclosure, repossession, or garnishment before taking action, hoping that someday something will happen to get them ahead.

However, unless you know your income will increase $300,000 in the next 10 years, that’s probably not going to happen, and you may never catch up and pay your debts. Once your credit card debt to more than 30% of your annual income, you’re probably in trouble. For people who make between $30,000 and $50,000 a year who have $10,000-$20,000 in credit card debt, it will be nearly impossible for them to ever pay off that debt, especially if they have a family and kids.

Waiting doesn’t make things better because the interest rate keeps increasing and the snowball just keeps getting bigger and bigger, which means the collection calls and harassment gets worse. Again, people tell me over and over again, “I wish I’d just done this sooner.”