Nova Scotians face difficulties seeking assistance with debt

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

HALIFAX, NS – 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 Atlantic Canadians struggling financially. As households begin to feel the financial toll, many are at a loss when it comes to finding help. Compared to the other provinces, Atlantic Canadians are the most likely (41%) to 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. More than half (54%) say they have difficulty trusting professional companies to help them get out of debt.

“It is critical those who are unable to manage their debt repayment obligations know where they can turn for professional assistance — because they are in a financially vulnerable position,” says Tina Powell, a local Licensed Insolvency Trustee with MNP LTD. “People may not know that Licensed Insolvency Trustees are the only federally-regulated debt professionals who are legally and ethically required to provide impartial guidance and expertise about all of the available debt-relief options, taking into consideration the individual’s unique financial situation.”

A lack of financial literacy could put indebted Atlantic Canadians at more risk and intensify the need for debt relief. With interest rates likely to continue trending upward this year, Atlantic Canadians are the most likely compared to the other provinces (30%) to say they don’t have a solid understanding of how increases impact their financial situation.

Powell says many individuals hesitate to seek out financial assistance and suffer needlessly due to the stigma of debt. Among the provinces, Atlantic Canadians and British Columbians 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 almost half of Atlantic Canadians (48%) know that Licensed Insolvency Trustees are the only debt professionals who can provide debt-relief options like Consumer Proposals and Bankruptcies, nearly four in 10 (38%) 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.

“I would caution Atlantic Canadians that unlicensed insolvency service providers may make bold claims guaranteeing they can make you debt-free, but only Licensed Insolvency Trustees can utilize the federal Bankruptcy & Insolvency Act to discharge individuals from debt. Not all debt advice is created equal,” explains Powell.

Those able to overcome their anxieties and reach out for help may face other hurdles in their search for debt help. Three in 10 (31%) Atlantic Canadians say they have paid for ineffective financial advice, more than any other province.

“Debt-free schemes and unregulated debt settlement firms may make statements that mislead individuals, promising to slash their debt, ask for a large up-front fee, or persuade them to take out additional loans to pay off debt, so it is important to be cautious,” warns Powell. “No two debt situations are alike, which is why the best place to start is with a free, confidential assessment of your finances by a Licensed Insolvency Trustee who will take a customized approach and outline the complete range of debt-relief options available.”

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.