Cut-Out Animation Problems

Hello,

I created a cut-out character, following the instructions from a 4-part series on cut-out animation from ToonBoonTips, Toon Boom Tips #48 Cut-Out Character Breakdown - YouTube (part 1 of 4). The end result character has functional rigging and moves properly, but I’m having problems with overlap. I’m not sure how to describe the problem, but I attached a JPG. What did I do wrong, what should I change?

Thanks In Advance