April 2023 MNP Consumer Debt Index Update (MNP 3 Minute Debt Break)

P

ersonal finances continue to be a major source of stress for Canadians, and half anticipate that the situation will continue to deteriorate. This is according to the latest MNP Consumer Debt Index conducted quarterly by Ipsos. When asked about the impact of Canada’s current economic conditions on their personal finances, half say they believe the worst is yet to come, while a third feel we are currently experiencing the worst part of the economic cycle. Fewer are optimistic about the future, with only 15 percent stating that the worst is behind us.

Facing both inflation and drastically higher interest rates on their outstanding debts, deeply indebted Canadians may be right to be feeling that the worst is yet to come. There isn’t much financial wiggle room in many household budgets, which illustrates the toll of higher interest rates — especially for those who can least afford it.

Nearly half of Canadians report that they are $200 away or less from not being able to meet all of their financial obligations, including three in 10 who say they already don’t make enough to cover their bills and debt payments. Half of Canadians still say they will be in financial trouble if interest rates go up much more. Three in five say they’re concerned about the impact of rising interest rates on their financial situation.

With interest rates stabilizing after last year’s successive increases, Canadians are feeling some reprieve. The Index rebounded to 89 points compared to the previous quarter, up 12 points from its all-time low. Fewer Canadians are concerned about their ability to pay their debts, although six in 10 remain ill at ease. More than half say they are confident with their ability to cover all living / family expenses in the next year without going further into debt and less than half are concerned about their current level of debt.

Whether expecting the worst or hoping for the best, Canadians should be proactive about managing their debt. Seek professional help right away to avoid a cycle of increasing debt and interest payments, which often lead to longer-term financial hardship. Many are hesitant to reach out for help due to the stigma of Bankruptcy, which only prolongs the financial stress and can lead to more serious problems like wage garnishments and harassment by collection agencies. 

Licensed Insolvency Trustees are the only debt-relief professionals who can offer unbiased, customized advice about all of the debt-relief options, including informal debt settlement, Consumer Proposals and Bankruptcy. Contact MNP and a Licensed Insolvency Trustee can offer a Free Confidential Consultation to review your financial situation and discuss their options to deal with debt.

Subscribe to MNP 3 Minute Debt Break on your favourite streaming service.