The latest BC Consumer Debt Study from Sands & Associates shows credit card bills are the number one driver of debt problems for BC consumers – and people are waiting longer than ever to seek debt help.
Having polled over 2,100 people from around the province who recently made an insolvency filing, the 2024 BC Consumer Debt Study offers unique insights into consumer debt issues across the province, exposing the realities of dealing with a personal debt problem and the serious impacts of debt issues on consumers’ health.
Sands & Associates President and Licensed Insolvency Trustee Blair Mantin joined CTV News to share key findings from the 2024 BC Consumer Debt Study.
Watch the clips here and learn more below:
- The 2024 BC Consumer Debt Study’s largest cohort (36%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started their debt relief process.
- Over half of individuals polled (56%) said credit card debt was the main type of debt they had – 4.5 times more than the next leading type of debt.
- Payday (or instalment) loans were the second-most reported (12%) type of problem debt for consumers, as well as tax debt (12%).
- Payday loan usage has almost doubled as the main type of problem debt for BC Consumer Debt Study participants since 2020’s study (6.3% of respondents attributed their main type of debt to payday loans in the 2020 BC Consumer Debt Study).
- 72% of people surveyed said overwhelming stress was how they knew their debts were becoming a problem.
Common Issues Driving Consumer Debt in BC
Four of the five top-reported causes of problem debt for consumers polled in the 2024 BC Consumer Debt Study may be related to issues outside the individual’s immediate control:
- Almost 1 in 4 people surveyed said the direct main cause of their debt was using credit for essential costs of living income could not cover (24%).
- Illness, injury or health-related problems (11%), marital or relationship breakdown (7%) and job-related issues (7%) were also direct main causes of debt identified by survey participants.
- 27% of British Columbians polled in the study attributed the direct main cause of their debt to overextended credit due to general financial mismanagement.
Debt Problem Warning Signs
An emotional cue was the top warning sign of a debt problem for most people:
- Over 7 in 10 individuals surveyed (72%) said overwhelming stress was how they knew their debts were becoming a problem.
- Other top signs of a debt problem reported by consumers included: Only making minimum payments (58%) and seeing debt balances remain almost the same every month, despite making payments (55%).
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Impacts of Problem Debt on Consumers
The BC Consumer Debt Study series reveals the devastating effects that money problems can cause consumers, with impacts experienced far beyond financial transactions. The effects of dealing with problem debt as reported by individuals polled included:
- Almost 4 in 5 people (79%) said their mental health suffered because of being in debt, and 3 in 5 individuals (60%) said their self-esteem suffered by being in debt.
- Over 4 in 5 people (84%) said they had a constant worry about debt.
- 78% had anxiety, 69% feelings of helplessness or hopelessness, and 61% had depression because of debt stress.
- Close to half (48%) of respondents said being in debt caused their physical health to suffer.
- Roughly 1 in 7 individuals said they experienced suicidal ideation because of their debt-stress.
Consumers Delaying Seeking Debt Help
Almost 4 in 5 people (79%) said their mental health suffered because of being in debt and despite this, only 6% of individuals said they sought help as soon as they knew they had a problem.
- 41% of consumers polled in the 2024 BC Consumer Debt Study said they waited more than two years before seeking help – a 51% increase since the 2018 BC Consumer Debt Study.
- Most survey respondents (62%) say they waited to seek professional debt help because they wanted to manage debt on their own.
- More than half (54% and 51% respectively) said they waited because they felt ashamed they couldn’t handle the debts they incurred or were embarrassed to ask for help.
Misinformation remains a concerning barrier for individuals dealing with overwhelming debt:
- More than 1 in 4 consumers surveyed (27%) said they delayed seeking help for their debts because they didn’t know where to seek help.
- Nearly a third of individuals polled (32%) said they waited to seek professional debt help because they thought there was no solution to their situation.
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Solving Debt Problems
- Roughly 1 in 3 people surveyed (34%) tried to deal with their debts by applying to extend credit limits on existing debts.
- 26% of consumers said they applied for consolidation financing, while 25% used payday or instalment loans, and 5% asked family or friends to co-sign a consolidation loan (5.2%).
- 33% of people said they borrowed from family or friends to make debt payments.
Individuals who recently used a legal debt relief process were surveyed for the 2024 BC Consumer Debt Study, with 85% of respondents who ultimately reorganized their debts using a Consumer Proposal, and 15% who sought debt forgiveness through Personal Bankruptcy. The debt relief option of choice for consumers has changed remarkably in recent years, with Consumer Proposals now far outpacing bankruptcy.
- Over 90% of individuals polled in the 2024 BC Consumer Debt Study expressed satisfaction with their choice to file a Consumer Proposal or Personal Bankruptcy to deal with their debts.
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Where to Get Safe, Professional Debt Help
Blair Mantin, President of Sands & Associates, the firm of Licensed Insolvency Trustees who perform the debt study series, says that solving a debt problem independently can be nearly impossible for many people, and that unfortunately many consumers become overwhelmed and are unaware of the support available to them.
As Blair explains, BC residents are encouraged to seek support and solutions from a Licensed Insolvency Trustee at the onset of a debt problem, and consumers should know that:
- You can connect directly with a Licensed Insolvency Trustee local to your area to seek free, confidential debt advice and explore all your options for dealing with debt.
- No referral or payment is necessary to have a free consultation, and there are no pre-qualifiers to meet.
- Consumers should be on guard against debt settlement agents and third-party referral sources that attempt to sell inferior or unregulated debt help services.
- Licensed Insolvency Trustees are Canada’s only official debt help experts, fully qualified and endorsed to provide guidance on dealing with your debt, and a range of debt management services.
- You don’t need to be facing an extreme financial situation to seek information from a Licensed Insolvency Trustee – anyone can get free, confidential advice about their situation and options.
Sands & Associates believes that open conversations and non-judgmental support are key to removing barriers for people struggling with debt. If you are feeling worried or stressed about your debt, or want to explore debt management solutions and resources, connect directly with a Licensed Insolvency Trustee local to your area for a free confidential consultation.
Sands & Associates is BC’s largest firm of Licensed Insolvency Trustees focused exclusively on non-judgmental debt help for consumers and our full suite of services is available by phone, video, or in person at a local BC office near you.