Technical debt, or quick fixes and shortcuts in software development, can lead to a downward spiral of bugs, errors, and performance issues, causing project delays, cost overruns, and team burnout. Identify red flags like code smells, quick fixes, and lack of documentation, then conduct a structured assessment and create a mitigation plan prioritizing critical areas and allocating resources. Effective communication with stakeholders is crucial to demonstrate the importance of addressing technical debt and its impact on project success.