Banking Overdrafts – Protection or Peril
As children, most of us had the unpleasant experience of getting in a little over our heads while swimming. However, once we could feel the bottom, we were able to push with our feet and head towards shallower and safer water.
For the thousands of people in the Toronto area who are struggling to pay their debts – overdrafts can provide a misleading and false sense of touching bottom. Once you feel it, you may not be able to head for safer water.
In an earlier article on the dangers of overdrafts, we discussed the ‘dollar draining cycle of overdrafts‘, how to take back control, and learn to better manage money. We showed how, in addition to being costly and hard to get out of, overdrafts can cultivate a wrong (and potentially harmful) attitude towards money.
But what happens if you cannot break free of overdrafts?
Being unable to pay off and stop using your overdrafts – may be an indication of serious debt problems.
You may have fallen behind during a period of unemployment, illness or family crisis.
You may be using overdrafts in an effort to pay off debts that ultimately are unpayable.
Whatever the reason,
- if you are too far in debt to stop using your overdraft, and
- you know you cannot get out of your financial chaos on your own,
- it may be time to talk to a licensed bankruptcy trustee, such as David Sklar & Associates – about a consumer proposal.
In Ontario, only licensed bankruptcy trustees can determine your eligibility as well as file and administer consumer proposals.
How can a consumer proposal help?
If you qualify for a consumer proposal, your trustee will work with you and present your unsecured creditors with your proposal to repay a portion of your debt. The proposal will help you to avoid bankruptcy and protect your assets from disbursal.
Your unsecured debts can include credit cards, CRA taxes, overdrafts, and more. There are some types of unsecured debts that cannot be included – such as child support, some student loans, court fines, and fraudulent debt. Your trustee will review the details with you.
Your secured debts, such as mortgages, car loans, etc. cannot be included in your proposal. You will be required to make your secured loan payments to keep those assets that have loans against them. However, with the reduced monthly payments for unsecured debts, most people who file for a consumer proposal, find it much easier to make their secured debt payments.
How do your find out if a consumer proposal is in your best interest?
If you are struggling with overdrafts and facing serious debt problems – it may be time to get the help you need to head towards safer water.
If you live in the Toronto area, you are welcome to call David Sklar & Associates at 416-498-9200 to book a free consultation with one of our caring, Licensed Debt Professionals™.
If you live outside the Toronto area, you can find a licensed trustee in your area by using the Superintendent of Bankruptcy’s Trustee Registry.
