British Columbians face difficulties seeking assistance with debt

More than half of British Columbians have difficulties trusting companies that assist with managing debt or are embarrassed to seek financial advice.

VANCOUVER, BC – May 30, 2022 – Soaring energy bills, skyrocketing food prices and rising interest rates coupled with pandemic-related losses and the end of government support programs have left many British Columbians struggling financially. As households begin to feel the financial toll, many are at a loss when it comes to finding help. One in three (36%) say they don’t know how to get out of debt or where to turn for relief, according to a recent poll conducted by Ipsos on behalf of MNP LTD. Compared to the other provinces, British Columbians are the most likely (59%) to say they have difficulty trusting professional companies to help them get out of debt.

“Individuals who are not able to cope with their debts and are financially vulnerable need to know who they can trust for professional debt advice — that is critical,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD in the Lower Mainland. “Remember that Licensed Insolvency Trustees are the only federally-regulated debt professionals who are ethically and legally bound to explain all of the debt-relief options available and provide unbiased advice based on the individual’s financial situation.”

A lack of financial literacy could put indebted British Columbians at more risk and intensify the need for debt relief. With interest rates likely to continue trending upward this year, one in four (24%) say they don’t have a solid understanding of how increases impact their financial situation.

Paul says many individuals hesitate to seek out financial assistance and suffer needlessly due to the stigma of debt. Among the provinces, British Columbians and Atlantic Canadians are the most likely (52%) to say they would be embarrassed to seek help if their financial situation was bad enough to consider Bankruptcy.

While nearly half of British Columbians (47%) know Licensed Insolvency Trustees are the only debt professionals who can provide debt-relief options like Consumer Proposals and Bankruptcies, four in 10 (43%) — more than any other province — believe there is no difference between credit counsellors, debt consultants, and Licensed Insolvency Trustees.

Licensed Insolvency Trustees are the only professionals authorized to administer Consumer Proposals and Bankruptcies. Consequently, those are the only debt solutions that can offer legal protection from creditor actions, and stop or prevent collection calls and wage garnishments.

“All debt advice is not created equal. British Columbians should be wary of unlicensed insolvency service providers who make bold statements promising to make them debt-free. Only Licensed Insolvency Trustees can employ the federal Bankruptcy & Insolvency Act to discharge individuals from debt,” explains Paul.

Those able to overcome their anxieties and reach out for help may face other hurdles in their search for debt help. One in four (27%) British Columbians say they have paid for ineffective financial advice.

“Be cautious of debt-free schemes and unregulated debt settlement companies who may make misleading claims. They might say they guarantee to cut your debt significantly, encourage you to take out loans to pay down your debt, or ask for a large fee up-front,” warns Paul. “We encourage individuals to obtain a free, confidential assessment of their financial situation from a Licensed Insolvency Trustee, who will detail all of the debt-relief options available. This is particularly important because each debt situation is unique and requires a customized approach.”

Debt relief options can include striking a deal with creditors through an informal debt settlement, consolidating all debts into one monthly payment, making a debt repayment plan through a Consumer Proposal, or declaring Bankruptcy.

About MNP LTD

MNP LTD, a division of the national accounting firm MNP LLP, is the largest insolvency practice in Canada. For more than 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working with individuals to help them recover from times of financial distress and regain control of their finances. With more than 240 offices from coast to coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit MNPdebt.ca to contact a Licensed Insolvency Trustee or use our free Do it Yourself (DIY) debt assessment tools. For regular, bite-sized insights about debt and personal finances, subscribe to the MNP 3 Minute Debt Break Podcast.

About the Survey

The data was compiled by Ipsos on behalf of MNP LTD between March 9 and March 15, 2022. For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to, coverage error and measurement error.

A summary of some of the national data is available by request.