Like the vast majority of countries in the western world, Canada is fast on its way to a debt crisis.
In the fifty-three years since Statistics Canada began tracking the issue, debt problems have increased every year bar one.
And, after further debt increases in the fourth quarter of 2019, the average Canadian household faces roughly $1.79 of debt for every dollar of disposable income.
Statistics also reveal that the problem isn’t set to slow anytime soon.
An astounding 47% of Canadians in a recent MNP survey predicted issues with covering even basic living expenses this year.
According to the Bank of Canada, these elevated household debt levels “remain the main risk to Canadian financial stability.”
And, there’s no denying the truth behind that claim.
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Understanding the reasons behind Canada’s debt crisis
Canadians are struggling with debt, and before they stand any chance at rising above, households must understand the leading causes for this issue.
This knowledge becomes especially pressing considering that the same MNP survey revealed most households had less than $200 of expendable income at the end of the month.
A fact that could easily lead to further debts in cases of emergency expenditure if we don’t inform ourselves while there’s still time.
In reality, there are many reasons for high debt statistics.
Still, surveys reveal that issues often tend to come about as a result of some similarities, including –
- Unaffordable mortgage/interest rates;
- High levels of borrowing (payday loans, etc.);
- A notable lack of savings;
- Financial illiteracy;
- Poor money management;
- High student loans;
- Sudden losses in income.
The faces behind Canada’s escalating debt
Perhaps the most worrying thing about these extensive debt issues is that they really can strike anyone, at any time of life.
In fact, general statistical findings reveal that the majority of Canadians now experience debt in some form throughout their lives.
Still, some groups are more at risk than others, and it’s worth considering this as we look for a route through the issue.
Recent years have particularly seen a rise in the amount of senior Canadian citizens having to file for some form of debt relief.
Individuals over 65 were, worryingly, 17 times more likely to file for bankruptcy in 2010 than in 1990.
And, if the general debt landscape is anything to go by, that’s a figure that has undoubtedly risen a great deal more in the last decade.
On the flip side of this issue, Canadians under the age of 55 are facing entirely new kinds of debt, including credit card increases, vehicle loans, and even student loans in light of the 7-year rule.
Finding a way through a nationwide debt
When debt is such a common part of daily life, it can be harder than ever to find a path through.
But, given that financial illiteracy and poor money management both feature highly in our reasons for issues arising, turning to professionals can surely prove useful here.
In reality, there is a range of different debt solutions on offer, any of which can help to clear financial footways despite rising debts across Canada.
Ultimately, these solutions will depend on everything from your credit rating to your assets, and a trustee can ensure that you’re informed and aware of the best path for your needs.
Some of the solutions on offer include –
Each of these solutions can prove valuable for different reasons and is undoubtedly sure to serve better than standard loan efforts for helping you to clear and manage debts at last.
Bankruptcy Canada can help you find a way through
For over twenty years, the Bankruptcy Canada team has been working with the best trustees and insolvency teams in the country.
Our market knowledge is next to none, and we can provide you with the tools you need to clear debts at last.
Already, we’ve helped 100,000 Canadians find their way through debt in our 430 trustee offices across Canada.
What’s more, our trustees are on-hand to help you with a free, no-obligation phone call to start your debt journey.
Whether you then opt for bankruptcy or one of our many other debt management solutions, you can rest easy that you’ll have the knowledge and expertise you need behind you to break from the statistics and become debt-free at last.
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