1 In 6 Canadians Go Bankrupt…You are not Alone!
Are you worried about the level of debt that you’re dealing with right now?
You’re not alone and in this article, we’ll reveal the dangerous situation that could lead to a lot of Canadians facing bankruptcy.
According to recent statistics, 1 in 6 Canadians are going to file a consumer proposal or declare bankruptcy in the future.
The numbers could be even worse than this due to the unexpected impact of the coronavirus in 2020.
But what’s happened and why is this becoming such a significant issue in Canada?
First, we need to break down the numbers further.
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The research suggests that up to 150,000 Canadians declare bankruptcy each year.
This means that throughout the next thirty years more than 4.5 million people are going to declare bankruptcy or file a consumer proposal.
Indeed, some researchers suggest that the number will climb even higher than this.
What’s Going Wrong?
Debt is one of the main causes of bankruptcy throughout Canada and unfortunately the level of personal debt throughout the country is constantly growing.
In 2012, the Bank of Canada released a report which dissected the household debt trends in the country, highlighting that debt is increasing.
This is largely due to lower than usual interest rates which has encouraged more borrowing.
Particularly for larger items and assets that people wouldn’t be able to afford without taking out loans.
It’s worth noting at this point that debt is not always bad news.
Indeed, debt can be beneficial for the economy.
Indeed, we have seen that debt can regularly help the housing market boom, particularly when there are low interest rates.
However, it is crucial for people to keep up with their payments.
That won’t happen when Canadians face issues with redundancy, illness or any reason why they are unable to work.
Difficult circumstances such as divorce, which is also becoming more common, can make the debt more difficult to deal with.
Where Do Things Stand Today?
Today, Canadians owe $2.3 trillion in total debt and it is worth noting that this number is constantly rising.
This includes $1.53 trillion in mortgage debt as well as $802.1 billion through consumer credit cards as well as non-mortgage loans.
As such, a significant amount of money owed is not secure.
What Steps Should You Take?
If you don’t want to be the unlucky sixth person who is declared insolvent, then you need to take action right now.
You need to make sure that you are budgeting effectively and constantly keeping a check on how much you are spending.
If you are already suffering in debt, then it’s important to seek out an option for debt relief.
There are numerous steps that you can take here to help you manage your debt more effectively before you consider filing for bankruptcy.
That should always be a last resort.
If you need more support, please contact us today.
We have helped more than one hundred thousand Canadians with their debt trouble and we’re confident we can support you too.
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