Canadians tend to be optimistic, which explains why some consumers don't fully grasp the seriousness of their debt problems. They continue to make only minimum payments, hoping that their personal finance situation will magically fix itself.

But there are some money-related warning signs that shouldn't be ignored.

One predictor of a looming financial crisis is when debtors have no clear plan for paying back what they owe. Not knowing how long repayment will take or the interest costs also facilitates careless spending and more accumulated debt.

We asked David Trahair, chartered accountant and best-selling author of Crushing Debt: Why Canadians Should Drop Everything and Pay Off Debt, to highlight other cautionary signals to which consumers must pay careful attention.

CreditCards.ca: What are some signs that a consumer has impending financial troubles?

David Trahair: Usually the signs are quite obvious. People can't pay off even 10 per cent of the balance on their monthly credit card statement, let alone the full amount. They've probably got problems with other areas of their finances, including late bills and even phone calls from debt collectors.

Denial is also a signal that someone needs help, and in itself is one of the biggest problems out there. People just don't want to face the problems they've got themselves into. Some hide their bills and statements in an effort to block out the financial pressure, which only makes the situation worse.

CreditCards.ca: Is paying a credit card bill using another card another warning sign?

Trahair: I have done a balance transfer in the past. At one point, some balance transfer offers would charge zero interest for a year on up to $20,000. At other times, the offer has been 3 per cent for up to 6 months.

Balance transfers can work for people who are disciplined. But as the credit card companies know, big spenders are unlikely to change their behaviour.

Other people run up their credit card debt to $20,000 and then take out a secured home equity line of credit (HELOC). After paying off their HELOC, they run their credit card debt back up to $20,000 because they didn't change their spending habits.

A lot of people don't change their habits until they experience some shocking event.

CreditCards.ca: How do you handle warning signs that you detect in friends and family members?

Trahair: That's a difficult one because a lot of people are good actors and mask their problems.

What I like to suggest is that people ask open-ended questions like, "How are things going?" or "Is everything OK?" If your friend or relative has significant debt problems, at some point they're likely to want to talk about it. As soon as they start talking about it, then it all comes out.

For immediate family, personal finance tracking has gotten quite easy now with electronic banking and credit card transactions available for download over a [specified] period of time. I just did it for our family from January 1 to June 30, categorized it all and figured out where all the money was going.

CreditCards.ca: What's the best action plan for dealing with severe warning signs?

Trahair: The first step would be to reach out to free, non-profit credit counselling services. If you Google "credit counselling service" and the name of your town or city, you'll find dozens of them. Some counsellors might do a free interview over the phone, while others have questionnaires on their website that people can go through.

For someone who's really in trouble, probably the best next step is to see a licensed trustee in bankruptcy. I'm sure a lot of those trustees would be willing to sit for half an hour just to have an open discussion, with no commitment.