Number of Atlantic Canadians Who Say They are $200 Away From Insolvency Drops Seven Points

Halifax, NS, January 20, 2020 — The number of Atlantic Canadians who say they are now $200 or less away from being insolvent at month end has dropped seven points since September to 49 percent, according to the latest MNP Consumer Debt Index conducted quarterly by Ipsos. Additionally, fewer (27%, -2%) say they are already insolvent, meaning they cannot meet all their monthly financial obligations. Yet, more than half (55%) of Atlantic Canadians are still not confident they will be able to cover their family and living expenses without going into further debt this year — an increase of 15 points.

Halifax streetview at sunset

“The latest wave of research signals an improving financial situation for some — and it is very positive to see fewer people are near that $200 or less level. Although it is clear many still have a way to go before they feel confident, they won’t go further into debt in 2020,” says Joe Wilkie, a Licensed Insolvency Trustee with MNP LTD.

More Atlantic Canadians do see blue skies on the horizon heading into the new year and beyond, as more expect their debt situation to improve. Atlantic Canadians’ net confidence in their financial futures a year down the road rose one point since September. When comparing their current debt situation to five years in the future, net confidence increased four points.

“Some Atlantic Canadians seem to have a newfound confidence they are moving in the right direction financially speaking — and that could be the result of many taking action to deal with their debt,” says Wilkie, who has seen a significant increase in the number of debtors inquiring about debt relief options at his office. 

Atlantic Canadians are also feeling better off now compared to the past. In fact, net optimism for both one- and five-year timeframes have increased four and six points respectively. Yet, one in five (21%) Atlantic Canadians still say their debt situation is much worse than it was five years ago.

 “After many years of using credit to make ends meet, some are still caught in an endless cycle of debt,” says Wilkie. “Anyone using any kind of credit to pay their basic living expenses should consider sitting down with a licensed professional to assess their financial situation and create plan to deal with the debt responsibly.”

The index showed Atlantic Canadians are less uneasy when it comes to being prepared for the unexpected expenses. For example, 3 in 10 (32%) are confident in their ability to cope with a life-changing event such as a serious illness (+9%), loss of employment, change in wage or seasonal work (+6%) without increasing their debt load.

“To break free of the debt cycle for good, debtors will not only need to pay off their creditors, but also change their mindset and behaviours. That includes developing a budget to help deal with rainy day expenses. The goal is to avoid getting back into the same trouble in the future,” says Wilkie.

While it seems more Atlantic Canadians are starting to seek professional help with their debt, one of the biggest behavioural changes still required among those who are severely indebted is shucking the tendency to isolate rather than reach out for guidance. 

“The longer you wait, the harder it can be to dig yourself out of debt. I often see clients arrive in our offices who have been struggling to manage their debts for years — even decades,” he explains. “There is no magic number for how much debt you should have to seek help. If it’s causing stress or impacting relationships, that’s when you know it’s time to get the support you need.”

MNP Ltd. offers Free Confidential Consultations and their team of Licensed Insolvency Trustees are empowered to help those struggling financially to make the most informed choices to deal with their debt. Licensed Insolvency Trustees are the only federally regulated professionals who can provide regulated insolvency options, such as a Consumer Proposals and Bankruptcies.

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 use our free Do it Yourself (DIY) debt assessment tools.  

About the MNP Consumer Debt Index

The MNP Consumer Debt Index measures Canadians’ attitudes toward their consumer debt and gauges their ability to pay 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 MNPdebt.ca/CDI to learn more.

The latest data, representing the eleventh wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between December 4 and December 9, 2019. For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within +2.5 percentage points, 19 times out of 20, of what the results would have been 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 the provincial data is available by request.