Latest BC Consumer Debt Study Finds Costs of Living Driving Personal Debt Problems

Over 1 in 4 consumers polled in the 2025 BC Consumer Debt Study attributed the direct main cause of their debt to using credit for essential costs of living income could not cover – a first in the BC Consumer Debt Study series 13-year history. 

Complete findings from Sands & Associates’ 2025 BC Consumer Debt Study were released today, uncovering insights into rising consumer debt problems in the province. Over 2,300 BC residents who recently made an insolvency (debt relief) filing participated in the thirteenth annual study, which offers a unique perspective on consumer debt issues and trends.

2025 BC Consumer Debt Study Highlights 

• Using credit for essential costs of living income could not cover was the top-reported cause of debt for over 1 in 4 individuals polled (27%) – a first in the BC Consumer Debt Study’s history.
• Nearly all study participants (95%) said their household has been impacted by recent inflation increases, including 27% of individuals who said their housing costs (rent or mortgage) have increased 50% or more.
• Credit card debt was identified as the main type of problem debt (58% of) survey participants were carrying – over 4.5 times more than the next leading debt type.
• 4 in 5 people polled (81%) said their mental health suffered as a result of being in debt.
• Over 7 in 10 BC consumers surveyed (72%) said overwhelming stress was how they knew their debts were becoming a problem.
• Only 5% of survey respondents said they sought help as soon as they knew they had a problem; the majority proportion (41%) said they waited more than two years before seeking help.
• Most people polled (65%) waited to seek professional debt help because they wanted to manage debt on their own.
• Nearly 9 in 10 study participants (89%) said their Consumer Proposal or Personal Bankruptcy filing has helped them manage day-to-day finances even though rising costs are noticeable. 

Click here to read the full 2025 BC Consumer Debt Study report
Click here to view and download the 2025 BC Consumer Debt Study infographic

Costs of Living a Key Driver of Consumer Debt in BC 

The impacts of post-COVID inflation on survey participants have been increasing since 2020, when just 11% of consumers said the main cause of their debt was using credit for essential costs of living income could not cover. Now, for the first time in the BC Consumer Debt Study’s history, 2025’s study has found:

• Using credit for essential costs of living income could not cover is now the top-reported (27%) direct main cause of debt for individuals polled – a 136% increase since 2020.
• Overextended credit due to general financial mismanagement, has now fallen to become the second-most reported (25%) cause of debt.

Along with difficulty meeting costs of living, other top-reported causes of problem debt for consumers can be reasonably attributed to circumstances or events outside the individual’s direct control:

• Illness, injury or health-related problems (11%), job-related issues (8%), and marital or relationship breakdown (7%) make up the other top-5 main causes of debt identified by British Columbians surveyed.

The Impact of Inflation in Consumer Debt Problems

Nearly all individuals polled in the 2025 BC Consumer Debt study (95%) indicated their household has been impacted by recent inflation increases, and the study findings illustrate the considerable effects of recent inflation on consumer households, most notably:

• 38% of survey participants indicated their food/grocery costs have increased 50% or more.
• 28% of people polled said their gas/transportation costs have increased 50% or more.
• Housing costs (rent or mortgage) have increased 50% or more according to 27% of study respondents.

Credit Card Debt Remains the Most Common Problem Debt for Individuals 

The largest cohort (35%) of 2025 study participants had between $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they began their debt relief process. 

• Credit card debt was the main type of debt more than half of survey participants (58%) were carrying – over 4.5 times more than the next leading debt type.
• Payday or instalment loans were the second-most reported type of debt for 12% of consumers, use of which has risen noticeably since 2020, followed by tax debt for 11% of individuals.

Due to the high borrowing costs and enhanced collection mechanisms available to Canada Revenue Agency, Licensed Insolvency Trustees commonly warn that unpaid credit card balances, payday loans, and government debts are particularly risky debts for consumers to carry.

Effects of Problem Debt on BC Consumers and their Families 

The BC Consumer Debt Study series has documented the considerable harm a debt problem brings to an individual’s wellbeing, and some of the many personal impacts include: 

Debt study participants also identified that being in debt affected other areas of their personal lives and relationships, including:

• 33% said that being in debt caused their relationships to suffer as a result, and that they had to put life events on hold (29%).
• Debt-stress also resulted in individuals alienating themselves from family or friends (29%), and arguments with their spouse or partner about money (25%).

Consumers Waiting Years to Seek Debt Help 

Despite suffering extreme effects of financial stress, only 5% of individuals surveyed in the 2025 BC Consumer Debt Study said they sought help as soon as they knew they had a problem. 

The perceived stigma of financial problems, self-judgment, and misinformation remain significant barriers to individuals seeking professional resources and support at the earliest signs of financial difficulty:

• Most consumers polled (65%) said they waited to seek professional debt help because they wanted to manage debt on their own.
• Roughly half (54% and 50% respectively) said they put off seeking help because they felt ashamed they couldn’t handle the debts they incurred or were embarrassed to ask for help.
• 40% of people surveyed also said they were worried about being judged.
• A third (34%) of survey participants delayed seeking debt help because they thought there was no solution to their situation, and 27% didn’t know where to seek help. 

How BC Consumers Attempted to Solve their Debt Problem 

Before working with a Licensed Insolvency Trustee, most consumers polled in the 2025 BC Consumer Debt Study took steps to try to deal with their debts on their own, commonly through more borrowing:

• 38% of people surveyed attempted to deal with their debt by applying to extend credit limits on existing debts; applying for consolidation financing (28%); using payday or instalment loans (25%).
• 30% of consumers polled said they borrowed from family or friends to make debt payments, and 5% asked family or friends to co-sign a consolidation loan. 

Post-Insolvency Outlook for Consumers 

In addition to addressing problem debt, 94% of 2025 BC Consumer Debt Study participants said their experience receiving debt help (through filing a Consumer Proposal or Personal Bankruptcy) positively impacted their financial literacy in some way. 

• Nearly two-thirds (65%) of consumers surveyed said getting professional debt help allowed them to improve their budgeting and/or savings skills.
• More than half (54% and 51% respectively) said they are more confident in day-to-day financial management and have a better understanding about credit and borrowing. 

Managing Rising Living Costs Post-Insolvency 

Most participants in the 2025 BC Consumer Debt Study (89%) said their Consumer Proposal or Personal Bankruptcy filing has helped them manage day-to-day finances even though rising costs are noticeable.

• Two-thirds (67%) of consumers polled said the worries they now have when it comes to money matters include being able to meet basic costs of living; having enough money to fund retirement (59%); and wanting to buy a home (28%). 

Click here to read the full 2025 BC Consumer Debt Study report
Click here to view and download the 2025 BC Consumer Debt Study infographic

About Sands & Associates and the BC Consumer Debt Study Series

Founded in 1990, Sands & Associates has become a leading force in British Columbia’s debt help sector, now recognized as the largest Licensed Insolvency Trustee firm in the province dedicated to consumer debt help. Our firm’s signature “debt smart with heart” philosophy drives our award-winning service and approach to supporting people facing financial difficulty, with an emphasis on dignity and empowerment.

Sands & Associates aims to foster open, honest discussions and increase awareness and support for consumers dealing with financial challenges. The BC Consumer Debt Study series provides an important platform for gaining insight into these deeply personal and often private experiences.

You are not alone in solving a debt problem – connect with a local, non-judgmental Sands & Associates Licensed Insolvency Trustee to explore your options and choose the debt-free plan that’s right for you. Book your free, confidential debt consultation today.