Debt Over-Load Has Many Struggling
Prince George, BC – The head of a non-profit group that assists people in financially dire straits says he’s not surprised by word the Canadian debt level is at an eight-year high…
According to a debt trend report released by the TransUnion credit agency this past week, non-mortgage debt rose for the second consecutive quarter with the average Canadian owing a total of $26,221 in the second quarter on their credit cards, line of credit, instalment loans, and auto loans. Here in BC, we topped the country with an average debt load more than $11-thousand higher at $37,879.
Credit Counselling Society President and CEO, Scott Hannah, says, "It’s in line with what we’ve been seeing in the last three months in terms of demand for services from our organization…we’ve seen an increase of approximately 20-percent over the same two months last year, this year."
With a head office in New Westminster, Hannah says he feels one of the main reasons British Columbians are carrying the highest debt load comes down to having, arguably, the most expensive housing costs in the country. "While we may have the highest housing costs, we don’t have the highest income and so there’s a discrepancy there," he says. "And so for many people, the ability to put a roof over their heads, manage their living expenses, manage their work expenses and credit obligations is becoming tougher and tougher – let alone put aside any money for retirement."
With auto loan debt making up a large percentage of the average debt-load, Hannah is encouraging people to look past the low interest rates and really assess their financial health before taking the plunge. "It’s not just a $150 payment every two weeks – it’s that payment plus HST, plus insurance, plus maintenance, let alone if they have the capacity to fit that into their existing budget," he emphasizes. "It means they’re taking on, in many cases, $20- to $30-thousand dollars of debt."
Hannah is also cautioning those experiencing trouble to be too quick to jump to the enticing offers from debt consolidation companies. He says there aren’t yet regulations in place to outline rules and practises for the sector and many consumers are finding it’s often not as easy as simply walking away from 50-percent of that debt.
Hannah says it’s important to get an objective opinion at the first sign of difficulty. "That’s the time to take a really hard look at how you’re managing your money – are you living within your means? are you living within your means-and-then-some, artificially inflating your pay cheque with the use of credit?"
Hannah strongly encourages anyone feeling ‘tipsy’ under their debt-load to seek out an accredited non-profit organization like www.nomoredebts.org, with certified counsellors to offer up not just one solution, but all the options available to buoy those drowning in debt.