There’s no denying that Canadians love to spend money.
The trouble is, most people are spending money they’ve borrowed from financial institutions such as banks!
According to data from Trading Economics, the average Canadian owes $1.72 for every $1 they earn.
Consumer spending is not a new thing; people have borrowed money for centuries to buy items beyond their means.
One of the most common examples is when individuals take out mortgages to buy a property.
The latest figures from Statistics Canada also suggest that the nation’s debt service ratio is 14.67%.
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The debt service ratio is the average Canadian repays to creditors, represented as a percentage of their income.
With that information in mind, why are many Canadians spending money instead of paying off their debts?
The answer’s simple: credit is easy to obtain for the majority of people.
The temptation to borrow money instead of saving for large purchases is too great to overcome.
Why is debt such a big deal?
When it comes to buying a house, for example, it’s unrealistic to expect people to save money their entire lives to fund such a purchase.
The trouble is, individuals take on other debt on top of mortgages.
As you can appreciate, the amount a person owes soon adds up, as does interest charges and other fees.
And if people experience a loss of income, that debt can end up spiralling out of control, resulting in debt hell.
When debt-saddled Canadians cannot afford to meet their monthly repayments, they’ll soon end up with debt collection letters and phone calls from creditors.
Many will even get emails and text messages with demands for payment.
How to tackle debt the right way
If you find yourself unable to meet your repayment obligations, the vital thing to remember is that you can resolve the problem.
The good news is there are many ways to tackle debt that will result in a satisfactory outcome for both you and your creditors.
One of the first things you should do is assess your personal budget.
That means listing your monthly expenses and noting down any regular income that you receive.
Armed with that information, and with the help of debt experts, you can determine the right option for your financial situation.
If you’ve got a good credit score, one option could be to get a debt consolidation loan to reduce your interest charges.
Another option you may wish to consider is a consumer proposal.
This is where you agree to make smaller, affordable payments in exchange for creditors, reducing your overall balance.
And, as a last resort, there’s also the option of bankruptcy.
If you’d like to start tackling your debt problems today, contact our friendly experts on (877) 879-4770.
Our services are confidential, and there’s no obligation to take up any of our recommendations.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?