Number Of British Columbians Within $200 Of Insolvency Every Month Jumps Five Points Since March

• More than a quarter say the stigma of Bankruptcy prevents them from seeking help
• Half say they would be too embarrassed to seek help
• One-quarter say they don’t know how to get out of debt or where to turn for help
• Half say they have difficulty trusting companies to help get them out of debt
  

 VANCOUVER, BC – July 29, 2019 – The latest wave of the MNP Debt Index shows that British Columbians' overall attitudes towards their personal financial situation have declined significantly since March. The number of people in the province who say they are $200 or less away from financial insolvency at month-end jumped five points to 44 per cent, the largest increase compared to the other provinces.

Those who find themselves in serious financial trouble could be digging themselves into a deeper hole by not seeking help when they need it. The survey, conducted by Ipsos on behalf of MNP LTD, shows half of British Canadians (49%) say they would be embarrassed to get help if their financial situation was bad enough to consider Bankruptcy. More than a quarter (28%) of survey respondents say the stigma surrounding Bankruptcy prevents them from seeking help.

“Shame and guilt prevent many people from talking about their debt, even when it becomes completely unmanageable. To make matters worse, our results show those who are most in need of help are the least inclined to ask for it,” says Lana Gilbertson, a Licensed Insolvency Trustee with MNP LTD, the country’s largest insolvency firm.

While sixty per cent (60%) of British Columbians rate their personal debt situation as bad, the survey revealed that many don't know how to improve it. One quarter (26%) said they don't know how to get out of debt or where to turn for help. What's more, is that there is a lack of trust among British Columbians when it comes to debt relief professionals. Half of British Columbians (50%) say that they have a hard time trusting professional companies to help them get out of debt.

"The trust issue may be a result of a lack of awareness about debt relief options available. Many people — particularly young people — don't know that there is a regulated system in place to help indebted individuals regain financial stability. It's equally important to be aware that Licensed Insolvency Trustees are the only professionals authorized to offer relief options such as consumer proposals and bankruptcies," says Gilbertson, adding that British Columbians should be wary of any companies that aggressively market quick-fix debt forgiveness.

The latest official figures from the Office of the Superintendent of Bankruptcy (OSB) show that the number of British Columbians who filed for bankruptcy or a consumer proposal in the first quarter of 2019 was up 3.9 per cent compared to the same quarter of last year.

"While the number of filings is on the rise, these numbers don't reflect the magnitude of the consumer debt challenges in the province because so many people sweat it out for years before reckoning with their debt. By the time they speak with a professional many may be forgoing basic necessities to avoid filing a consumer proposal or bankruptcy," says Gilbertson.

 An overwhelming majority of British Columbians (85%) believe that there is no shame in seeking financial help with one's debt. There is also a fair amount of sympathy towards those who have to declare bankruptcy. Fewer than four in ten (38%) agree with the statement that those who declare bankruptcy are looking for the easy way out of their financial problems.

"Our Index consistently tells us that many people in the province are on the brink of not being able to meet their debt repayment obligations. So, if you are struggling, it's important to know that you are not alone and there is absolutely no reason to be embarrassed about seeking help from a licenced professional," says Gilbertson. 

MNP Consumer Debt Index – Update

The number of Canadians $200 or less away from financial insolvency at month-end decreased four points to 44 per cent. Those in Alberta (44%, -4 points), Saskatchewan/Manitoba (40%, -6 points), Ontario (44%, -4 points), Quebec (43%, -8 points), Atlantic Provinces (46%, -9 points) saw the biggest declines, whereas British Columbia (44%, +5 points) has seen a sharp increase.

Although the number of British Columbians teetering close to insolvency is on the rise, there is some improvement on their future outlook.  Nearly four in ten (38%) think their debt situation will be better a year from now, with net optimism up three points from March to stand at 27 per cent. Looking five years into the future, almost half (48%) believe that their future debt situation will be better than it is today, with net optimism up four points to 37 per cent. 

Still, nearly half of British Columbians (55%, unchanged) don't feel like they will be able to cover their family and living expenses without going into further debt and roughly half (51%, +1 points) are still concerned about the impact of rising interest rates on their financial situation. Four in ten indicate they regret the amount of debt they've taken on in their life (42%, -1 points) and are concerned about their level of debt (42%, +1 points).

After an all-time high in June 2018, the MNP Consumer Debt Index has been on a gradual decline. The latest data, representing the ninth wave, shows the decline has at least been temporarily halted as the index holds steady at 97. 

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 230 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 get a free checkup for your debt health using the MNP Debt Scale.

MNP LTD is the creator of the MNP Consumer Debt Index, an industry-leading national barometer of financial pressure among Canadians.

About the MNP Consumer Debt Index

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 230 Canadian 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 get a free checkup for your debt health using the MNP Debt Scale.

MNP LTD is the creator of the MNP Consumer Debt Index, an industry-leading national barometer of financial pressure among Canadians.

CONTACT

To learn more about the survey and how MNP can help you manage your debt challenges, contact Lana Gilbertson, CIRP, LIT, Senior Vice-President, MNP Ltd., at 1.877.363.3437 or [email protected]