Albertans face difficulties seeking assistance with debt

Half of Albertans have difficulties trusting companies that assist with managing debt or are embarrassed to seek financial advice.

CALGARY, AB – 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 Albertans struggling financially. As households begin to feel the financial toll, many are at a loss when it comes to finding help. One in three (35%) 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. Half (51%) say they have difficulty trusting professional companies to help them get out of debt.

“It’s critical that vulnerable individuals who are struggling to manage their debts, know who to trust for professional guidance,” says Donna Carson, a Licensed Insolvency Trustee with Alberta-based MNP LTD. “Keep in mind that Licensed Insolvency Trustees are the only federally-regulated debt professionals who are legally and ethically required to explain all of the debt-relief options available and provide unbiased advice based on an individual’s circumstances.”

A lack of financial literacy could put indebted Albertans at more risk and intensify the need for debt relief. With interest rates likely to continue trending upward this year, one in five (22%) say they don’t have a solid understanding of how increases impact their financial situation.

Carson says many individuals hesitate to seek out financial assistance and suffer needlessly due to the stigma of debt. Nearly half of Albertans (47%) say they would be embarrassed to seek help if their financial situation was bad enough to consider Bankruptcy.

While nearly four in 10 Albertans (38%) know that Licensed Insolvency Trustees are the only debt professionals who can provide debt-relief options like Consumer Proposals and Bankruptcies, one in three (32%) 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.

“The reality is not all debt advice is not created equal. Albertans should be cautious of insolvency service providers who are unlicensed and may make bold claims guaranteeing freedom from debt — it is important to remember that only Licensed Insolvency Trustees can use the federal Bankruptcy & Insolvency Act to discharge people from debt,” explains Carson.

Those able to overcome their anxieties and reach out for help may face other hurdles in their search for debt help. More than a quarter (28%) of Albertans say they have paid for ineffective financial advice.

“Be wary of debt-free schemes and unregulated debt settlement companies that may ask for a large up-front fee, urge you to take out loans to pay off your debt, or promise to slash your debt — their statements may be misleading,” warns Carson. “No debt situation is alike, which is why a good starting point is a free, confidential assessment of your finances by a Licensed Insolvency Trustee who will outline all of the options available in detail.”

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.