Credit card debt is a big problem for Canadians, in general.
In fact, as of 2020, Canadians carried about $80,000,000,000 in credit card debt.
With so many people struggling to pay their bills, it’s not surprising that living in overdraft is becoming more common.
Overdraft occurs when your bank allows you to spend more money than you actually have.
That can be used to pay off credit cards or other bills, and in some cases, it might seem useful if you have a hard month or money is tight.
But, consistently going into overdraft can be a dangerous game to play, and you may find yourself in more debt than you can climb out of on your own.
Remember, that money you’re spending isn’t yours, and you will have to pay it back – many times, with a fee attached.
If you’re spending every month in overdraft as you’re just trying to get by, it could be a sign of a bigger debt problem, especially if you’re taking out that money to pay other bills.
Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation
Are You Struggling With Debt? It’s Time to Face Your Fears
No one wants to admit they’re struggling, financially.
But, you’re certainly not alone if you’re facing that problem.
In fact, about 26% of Canadians struggle to pay their monthly bills.
Thanks to the impact of the COVID-19 pandemic, that number is likely to increase as more people face unemployment.
Unfortunately, far too many people try to ignore their debt or think that by going into overdraft to pay bills, they are making headway to climb out of it.
But, it’s essentially like replacing one debt with another.
Not ready to admit you might be struggling financially?
Take a look at some of these common signs:
- You’re consistently contacted by creditors.
- You’re only making minimum payments on your credit cards.
- You miss payments on monthly bills.
- You hide your spending habits from your family.
- You’re constantly worried/stressed about money or debt.
Letting your financial issues plague you in silence can cause a lot of stress, and living in overdraft doesn’t help.
Additionally, if your overdraft maxes out, you’ll likely start to get calls from your bank.
Again, replacing one debt with another doesn’t help, and can often make things worse.
Some banks offer overdraft protection options, but that protection may not be worth it for everyone.
What Are Your Other Options?
By talking to a Licensed Insolvency Trustee at Bankruptcy Canada, you can learn more about other debt-relief options, including filing a Consumer Proposal, so you don’t have to continue living in overdraft and you can finally have money in your bank account to pay off your bills each month.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?