3 Indicators You’re in Too Much Debt and What to Do About Them

September 7th, 2021
3 Indicators You’re in Too Much Debt and What to Do About Them

Many Canadians are in debt.  For many people, it has become normalized to be in debt and the impacts on various aspects of our lives have just become part of the “package”. However, not everyone fully grasps all of the costs and implications of being in debt.

In its simplest sense, debt is the money you owe someone. However, many Canadians continue to struggle with managing their debt levels and the related issues that comes with it, making it harder for them to live a quality life.

What’s important here is to identify if, or when, the debt is taking control of your life; because each day that you fall deeper into debt, the more complicated it can be to eventually become debt free.

Therefore, it’s essential you can identify and recognize some of the warning signs, which are:

1. Unable to Pay Minimum Monthly Payments:

A big warning sign is when you have too much debt and you can’t pay the monthly minimum on your debts, let alone cover your basic living expenses and necessities. This often occurs when there is not enough money left over after all of your living expenses have been paid.  Even though it can be stressful when bills are piling up, if you can, try to make sure that minimum payments are made every month to decrease the impact of defaulting on your obligations.

2. Getting Calls from Collection Agencies:

Nobody likes to receive a call from a collection agency, but if you have debts that have gone past their deadlines, these calls are inevitable. If you found you are on the receiving end of so many collection calls that you’re reluctant to answer the phone every time it rings, that’s a clear warning sign that you’re in trouble and that you should consult someone to help with your debt.

Fortunately collection agencies in Canada have limits on how far they can go. For one, agents are not allowed to threaten and call individuals outside of a specific times by law. Moreover, these people are not allowed to talk about your debt with anyone else, unless your loan has a co-signer. There are also a number of other tips to deal with debt collectors laid out in our free e-book, available online.

That being said, it’s still stressful to deal with these calls, and if you find that you’re getting a lot of them every week, then it’s likely that you are in too much debt.

3. Frequent Over limit and Overdraft Fees:

Spending too money and having to pay for bank fees, overdraft charges and interest will definitely put you in debt, or sink you further deeper into debt. Overdraft charges occur when your account becomes overdrawn because your balance is less than zero and you start to borrow from the bank to have your transactions to process. This is like having a revolving loan that is attached to your chequing account.  Even though it’s very convenient, your bank will charge you overdraft user- fees and high interest because it’s considered a higher risk type of loan and this only exacerbates the problem.

The same thing applies when you spend more than your credit card limit. You will be charged an over-limit fee when this happens because you have extended yourself past the credit amount available. You should always review your banking agreements as fees and interest for overdrafts vary.

If you get frequent over-limit fees on your credit cards, then this is a strong indicator that you have too much debt. Aside from paying costly fees, these often hurt your credit score. Try not to use more than 70% of your credit limit at any given time. Staying under 70% indicates that you are not approaching dangerous levels of debt.   If you exceed 70% of your credit utilization, it indicates that you are experiencing financial difficulty and may not able to meet your ongoing obligations.

What to Do?

When you have too much debt that it gets too overwhelming, there are a few things you can do:

  • Create a budget;
  • Devise a repayment strategy;
  • Consider getting a debt consolidation loan;
  • Reach out to a Licensed Insolvency Trustee for an explanation of all options.


Knowing the financial warning signs that you’re struggling with debt is important to help you overcome it. The good news is, you can get out of your debt as long as you have the right support and help. Fortunately, Paul J. Pickering and Associates Limited has been offering debt relief solutions in London, Ontario for over 30 years.  We specialize in debt counselling, proposals, consumer proposals and bankruptcies to help Canadians get back on track with their finances. Contact us today to get started!