The 2019 BC Consumer Debt Study recently released by BC Licensed Insolvency Trustees Sands & Associates has local debt help professionals concerned about where the apparent lack of financial literacy and specifically awareness of debt help may be leaving consumers.
Sands & Associates Licensed Insolvency Trustee and Senior Vice-President Blair Mantin joined Global News to discuss some of the key takeaways his firm had from this year’s annual study. Also joining Global News was Debbie, a past Sands & Associates client and study participant who shared some of her personal insights about the need for better financial literacy education for consumers, as well as some of her struggles in managing credit card debt and student loans before working with Sands & Associates.
Watch the clip here, and read more below:
Highlight of Key Findings from Sands & Associates’ 2019 BC Consumer Debt Study
- The largest proportion of participants indicated they were carrying between $25,000 and $49,999 worth of debt (excluding vehicle loans and/or mortgages) at the time they started their debt relief process.
- Credit card debt was cited as being the main type of debt that 55.7% of respondents had, with lines of credit following at 12.6% and tax debt at 11.6%.
- The top main causes of debt reported were an overextension of credit and financial mismanagement, job related, and illness, injury or health-related problems.
- The highest reported main source of income from survey respondents was from full-time work 54.3% followed by retirement pension income (private or public pensions, CPP, OAS, etc.) at 14.7%.
- Majority of respondents (79.4%) indicated they were renting at the time they sought debt solutions; only 4.4% of respondents were homeowners.
- 6% of participants indicated that their credit score could be described as ranging between “good” and “excellent” at the time they started their debt relief process.
Some of the alarming impacts that debt-stress had on consumers across the province as highlighted in the 2019 BC Consumer Debt Study included:
- Nearly 90% of participants stated they experienced a constant or daily worry about their debts or general finances.
- Anxiety or depression was cited as a debt-stress impact by 77.1% of respondents.
- Nearly 1 in 5 respondents said the stress of their debt resulted in them experiencing thoughts of suicide.
- Overwhelming stress, only making minimum payments, and accumulating more debt were cited as the top indicators that debts were becoming a problem for participants.
- 70% of consumers said they delayed seeking professional assistance because they were trying to manage on their own, as well as feeling ashamed of being unable to handle debts incurred (49.7%) and worry about being judged or feeling embarrassed (44.1%).
With money problems affecting consumers so severely yet seeming to continue as social taboo – real or perceived – Licensed Insolvency Trustee Blair Mantin feels that debt and debt challenges need to be brought out into the light.
While many consumers who fit into the statistics noted in the study are still trying to deal with debts on their own, debt help professionals like Blair say it’s important to be able to recognize when you’re approaching a financial tipping point and get ahead of the problem, taking steps to get help before the situation escalates or people are struggling for years.
It is the hope of Sands & Associates that the deeply personal insights shared by participants of the study will draw attention to the needed consumer awareness, education around financial literacy – and above all – conversations about just how common it is to face a debt problem, regardless of age.
Fast Facts About Debt Help in Canada
Although participants in the 2019 BC Consumer Debt Study did eventually find a solution to deal with their debts, either by filing Personal Bankruptcy or instead consolidating debt using a Consumer Proposal, 37.5% said they waited to seek professional debt help because they thought there was no solution to their situation.
With this top of mind, Blair Mantin shared some basic facts about debt help that consumers should know:
- Debt help for virtually all types of debt exists – but not all solutions and professionals are created equal:
- In Canada only Licensed Insolvency Trustees are endorsed and regulated by the federal government
- Debt solutions offered by Licensed Insolvency Trustees can consolidate and cut nearly all types of debts – including government debts
- Bankruptcy is not the only option to write-off unmanageable debts:
- Consumer Proposals are an advantageous debt option that allow you to consolidate your debts without borrowing or interest, often reducing the amount that needs to be repaid, in full settlement
- Debt restructuring is not a “life sentence”:
- Neither bankruptcy nor Consumer Proposal processes will automatically mean losing your assets, income or privacy
- Whether filing Personal Bankruptcy or consolidating with a Consumer Proposal, most people will go on to obtain new credit (including mortgages or vehicle loans) within a few short years
Connect with a local Licensed Insolvency Trustee to discuss your situation and get a plan to be debt-free – book your confidential free debt consultation with Sands & Associates today.