Denis

“Dear Steve,

I am currently incurring $150 worth of bank charges every month, due to unpaid direct debits and going over my overdraft limit. I have phoned the bank and asked for their help, but they say their unable to do anything. My debts are now starting to snowball.

Is there anything that the banks are obliged to do to help stop me going further in to debt?

Dennis”

The Answer

Dear Dennis,

The bank is in business to make money and it sounds like your situation is making them extra dollars. Unfortunately this situation exists becuase you are overdrawn on your account and you’ve used up your line of credit in your overdraft account as well. Using an overdraft line of credit on a regular basis can be hugely expensive and a costly way to borrow.

Ultimately the only way out of this situation is to pay off your overdraft balance and make sure that more is not coming out of your account than you are putting in.

One option would be to terminate all direct debits and pay for bills with a check or cash until this situation gets better under control. You might also want to close your account and move to another bank and start over again and avoid giving anyone your direct debit information. Of course that will not change your obligation to repay all the money owed to the first bank.

You could always contact the state banking commission in your state to see if there are any local rules or practices that might limit the amount of bank charges you can get hit with.