How Do You Know If You Are Over-Indebted?
You may be over-indebted if your total monthly debt repayments plus essential living expenses exceed your net income, if you use one credit account to pay another, or if you regularly miss or juggle payments. Over-indebtedness means you cannot satisfy all your debt obligations in a timely manner. A financial assessment with a registered debt counsellor can confirm your position.
Key Points
- Debt plus essentials exceeding income signals over-indebtedness.
- Using credit to pay credit is a key warning sign.
- Missing or juggling payments indicates strain.
- A financial assessment confirms your position.
The formal meaning
Under the National Credit Act, a consumer is over-indebted when the preponderance of available financial information indicates they cannot satisfy all their credit obligations in a timely manner. This is assessed using income, living expenses and debt commitments.
A registered debt counsellor performs this assessment formally as part of a debt-review application.
Practical warning signs
You use one credit account to pay another. You only make minimum payments. Balances stay high despite regular payments. You receive calls from creditors or collectors. You have no savings and no buffer for emergencies. You juggle which accounts to pay each month.
If several of these apply, you may be over-indebted.
What to do
Complete a budget showing your income, essentials and debt. If debt plus essentials exceed income, contact a registered debt counsellor for a financial assessment. If you qualify, debt review can restructure your repayments to an affordable level.
Acting early — before legal proceedings begin — generally gives you more options.
Frequently Asked Questions
Worried That Your Debt Has Become Unaffordable?
Debt Guidance can assess your income, essential expenses and debt commitments to determine whether debt review may be appropriate.
Reviewed by Carolina Guevara Harris
Registered Debt Counsellor · NCRDC3152
Last updated: 17 September 2025
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