Atlantic Canadians Wary And Embarrassed About Seeking Debt Relief

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

HALIFAX, NS July 29, 2019 –Atlantic Canadians who find themselves in serious financial trouble could be digging themselves into a deeper hole by not seeking out help when they need it. A new survey conducted by Ipsos on behalf of MNP LTD, shows almost half of Atlantic Canadians (47%) 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.

“Dealing with consumer debt can be extremely stressful and isolating because shame prevents many people from talking about it. Unfortunately, our survey shows those who are most in need of help are the least inclined to ask for it,” says Joe Wilkie, a Licensed Insolvency Trustee in Regina with MNP LTD, the country’s largest insolvency firm.

While over sixty per cent (61%) of Atlantic Canadians rate their personal debt situation as bad, the survey revealed that many don't know how to improve it.  One in three (32%) 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 Atlantic Canadians when it comes to debt relief professionals. Half of Atlantic Canadians (50%) say that they have a hard time trusting professional companies to help them get out of debt.

"The trust issue points to a lack of financial literacy and awareness about debt relief options available. Many people don't know that there is a regulated system in place to help severely indebted individuals regain financial stability," says Powell, adding that Atlantic Canadians should be wary of any companies that aggressively market quick-fix debt forgiveness. "Licensed Insolvency Trustees are the only professionals authorized to offer relief options such as consumer proposals and bankruptcies." 

The latest official figures from the Office of the Superintendent of Bankruptcy (OSB) show that the number of Nova Scotians who filed for bankruptcy or a consumer proposal in the first quarter of 2019 was up 6.5 per cent compared to the same quarter of last year.

"The number of people filing is on the rise but this still doesn't reflect the magnitude of the consumer debt challenges in the province. So many people struggling wait until they are in a dire situation before finally seeking help. Many may be even forgoing basic necessities to avoid filing a consumer proposal or bankruptcy," says Powell.

An overwhelming majority of Atlantic Canadians (86%) believe that there is no shame in seeking financial help with one's debt. In fact, Atlantic Canadians are the most sympathetic towards those who have to declare bankruptcy, compared to the other provinces. Fewer than three in ten (26%) agree with the statement that those who declare bankruptcy are looking for the easy way out of their financial problems.

"Our survey consistently tells us that around half of Atlantic Canadians are on the brink of insolvency. What this says to those who are struggling is: you are not alone and there is no shame in seeking professional help to resolve your struggles with debt."

MNP Consumer Debt Index – Update

The latest wave of the MNP Debt Index shows that Atlantic Canadians' overall attitudes towards their personal financial situation have improved slightly since March. The number of Atlantic Canadians $200 or less away from financial insolvency at month-end decreased nine points to 46 per cent. Atlantic provinces saw the biggest decline, followed by Alberta (44%, -4 points), Saskatchewan/Manitoba (40%, -6 points), Ontario (44%, -4 points), Quebec (43%, -8 points), whereas British Columbia (44%, +5 points) has seen a sharp increase.

 Not only do Atlantic Canadians see their current situation as being better than it was in the past, but also are starting to envision a better future ahead for themselves. Four in ten (41%) think their debt situation will be better a year from now, with net optimism up seven points from March to stand at 31 per cent. Looking five years into the future, half (50%) believe that their future debt situation will be better than it is today, with net optimism up two points to 41 per cent. 

 Still, more than four in ten Atlantic Canadians (55%, +3 points) don't feel like they will be able to cover their family and living expenses without going into further debt and roughly half (48%, unchanged) 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 (44%, +3 points) and are concerned about their level of debt (44%, -7 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 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.

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

The MNP Consumer Debt Index measures Canadians' attitudes toward their consumer debt and gauges their ability to pay their bills, endure unexpected expenses, and absorb interest-rate fluctuations without approaching insolvency. Conducted by Ipsos and updated quarterly, the Index is an industry-leading barometer of financial pressure or relief among Canadians. Visit www.MNPdebt.ca/CDI to learn more.

The latest data, representing the ninth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between June 14 and June 17, 2019. For this survey, a sample of 2,111 Canadians aged 18 years and over was interviewed. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.4 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.