Recent news reports have indicated a troubling situation for Canadian consumer debt.
For the first time ever, Canadians have more than $100 billion in credit card debt, according to TransUnion Canada.
Forecasts also predict that the average Canadian’s non-mortgage debt may increase by $31,531 per person by the end of 2020. And delinquency rates – the number of people who don’t pay their bills – may also go up this year, as might the average mortgage balance.
Debt is a real problem for a growing number of Canadian consumers. CTV News recently reported that the number of personal insolvencies (bankruptcies and consumer proposals) being filed is at the highest level they have been in a decade.
A CIBC survey found that 71% of respondents say they are concerned about the rising costs of household goods going into 2020. About 55% say they fear a potential economic recession. And a survey from Manulife reported that two in five indebted Canadians don’t ever expect to escape their debts.
Putting it all together – what can you do if you’re struggling with debt?
Did you relate to any of the reports above? Do you worry about your financial future and ability – or lack thereof – to repay debts?
You’re not alone. And debt repayment doesn’t have to be a struggle.
Many people rely on credit to maintain their lifestyle. The problem with this approach is that credit isn’t just credit. If you charge $100 to your credit card, it’s not just $100 you’ll have to pay back. The interest payments on top of that can make it $110 (or more). While it might only seem like a little bit, it’s easy to snowball.
When you don’t have a plan to repay the credit, it builds and builds and builds — until it reaches a point where it seems impossible to pay back.
If you have been dependent on credit for a long time and don’t see a way out, you may have reached the point where it makes more sense to wipe the slate and start clean.
Some companies can help you both deal with debt and rebuild credit. The key is knowing which ones to trust.
The uncomfortable truth is that when you’re in this situation, there are a lot of businesses that will try to take advantage of you – like payday loans – and the “quick fix” approach may seem like your best option.
Instead, look for a company with a long-standing reputation and the true ability to help you deal with debt for good — and build your finances back up.
Finding help – What to look for and what to avoid
In general, you want to make sure that when seeking debt help you:
- Work with a lender with clear fees and interest rates – there should be no hidden or upfront fees.
- Work with a lender with a clear repayment schedule. You should know what you are paying and when it must be paid.
- Work with a lender that reports to the Canadian credit bureaus. This is a must for rebuilding credit.
- Work with a lender who will explore options with you. If a lender tells you that their product is your only chance, this is a red flag. They should be able to tell you about all the possibilities — including filing for insolvency.
At Prudent Financial Services, we have helped thousands of Canadians get out of debt and rebuild credit. Our loans can be used to consolidate outstanding debts no matter what your credit situation is.
If you decide to file for insolvency, we have options available too. We loan to people who have filed for bankruptcy (even if it is undischarged) and those who have filed for a consumer proposal (whether it is completed or not).
Help is available. You don’t have to struggle alone with Canadian consumer debt.
Reach out today to see if you qualify for a loan from Prudent Financial Services. Call 1-888-852-7647 or visit www.prudentfinancial.net.