Forty-nine per cent of Canadians believe they are teetering on the brink of insolvency, according to the latest MNP Consumer Debt Index published Monday.
We were already worried about the debt levels of Canadians and the situation has gotten worse. Since December, Canadians have become more worried about their consumer debt than ever before. Almost half (46 per cent) are worried, according to data compiled by Ipsos on behalf of MNP Ltd. earlier this month. That is a 10-point jump since December and the highest level recorded since the insolvency firm began tracking in 2017.
About half of those surveyed said they are $200 or less away from not being able to pay their monthly bills. This number includes the 25 per cent who say they are already unable to meet their debt obligations. As more households lose their income, anxieties are only going to mount. Thirty-four per cent surveyed said they were worried about job security.
This fear is very real as the COVID-19 pandemic has many losing their income overnight. While delinquencies in the past have been low, we know some Canadians are living paycheque-to-paycheque, with little wiggle in household budgets for this sort of major income disruption.
And my fear is it’s only going to get worse.
“Our results underscore how vulnerable Canadian households are to income interruption. Over the next few months we’ll likely see an unfolding of two crises: the global pandemic and the bursting of the Canadian consumer debt bubble,” said MNP President Grant Bazian in a release.
This is a very scary time and sadly there is not a quick fix. If you can avoid it, don’t resort to high-cost payday loans or high-interest credit cards.
Instead, consider the following:
- Pay the minimum for now on outstanding debt
- Pay the most expensive debt first
- Cut back on everything but necessities. Don’t panic buy.
- Consolidate your debt. You may even consider financing your mortgage or explore a consolidation loan.
- Consider speaking with a credit counsellor. There are programs and options available that the government has now put into place to assist you through a challenging financial situation.
But the most important step is acknowledging you might be in over your head and you can’t do it alone. There’s no shame in that. It takes courage and strength to get through this difficult time. https://www.bnnbloomberg.ca/nearly-half-of-canadians-on-the-brink-of-insolvency-survey-finds-1.1414488?fbclid=IwAR3Bpym88ALjMeL0NC39D3_wzNCvjEg3stP2HwQD0FcNKZrar4vgxi0Ky_0