One-Third Of Canadians Are Overwhelmed By Debt

Personal debt is usually a reason for concern. Many people struggle with it every month. For some Canadians, however, the situation has reached a state of hopelessness. Three out of ten Canadian families are unable to pay their monthly bills and expenses. Half of this group is struggling with insolvency. Personal bankruptcies are on the rise.

The problem isn’t that the monthly necessities are too expenses. It’s that Canadians have been on a spending spree and accumulating debt that is now coming to haunt them. Someone has to pay the piper.

In a recent survey, almost 30 percent of people admitted to not being able to cover their monthly necessities. If this group were to include those that are a mere $200 from insolvency each month, the number rises to 50 percent, as opposed to 46 percent a year ago. Many Canadians are simply not paying off their debt or ignoring it as the pile keeps growing each month. They feel helpless and hopeless about what to do. Financial optimism has reached an eleven-year low.

Many debtors see bankruptcy as the only solution. Bankruptcy filings are up by almost 9 percent from a year ago. In some areas, such as Saskatchewan and Ontario, the fillings are up 19 percent and 12.2 percent, respectively. These numbers are expected to worsen. Those who intend to borrow to pay off their debts will find higher interest rates making borrowing money more costly. It is unlikely that the Bank of Canada will cut its interest rate in 2020.

At this time, Canadians are finding it costly to borrow, and those costs will probably only get higher. Canadian provinces will soon announce their 2020 budgets. This is an excellent opportunity to reverse the mushrooming debt escalation and take control of Canada’s finances.

Since the financial crisis of 2008, government debt has ballooned from $837 billion to $1.5 trillion in 2019. This increase is almost entirely due to a continued increase in government spending. The Canadian debt shackles every Canadian man, woman, and child with $39,483 of debt. That is only an average. Some provinces, such as Newfoundland and Labrador, have a higher per-person debt level. In Newfoundland, the individual government debt allocation amounts to $48,478.

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