Almost 4 in 5 consumers polled in the 2024 BC Consumer Debt Study say their mental health suffered being in debt and 40% of people surveyed waited more than two years to seek professional debt help.
Findings from Sands & Associates’ 2024 BC Consumer Debt Study were released today, offering insights into consumer debt issues across the province. The twelfth annual study polled over 2,100 people from around British Columbia who recently made an insolvency (formal debt relief) filing, inviting individuals to share their personal insights and journey when dealing with a debt problem.
As Blair Mantin President of Sands & Associates, BC’s largest firm of Licensed Insolvency Trustees focused on consumer debt help explains, the annual study series aims to highlight the causes and effects of problem debt on British Columbians:
“Consumers are waiting longer than ever before to seek help, and as leaders in BC’s debt management sector, we feel it’s one of our key responsibilities to bring these issues – and solutions – to light.
Licensed Insolvency Trustees see firsthand how deeply financial challenges impact people, in virtually every aspect of their lives – and one of the most frustrating things is that so many consumers feel they are alone and don’t know they have resources available to help them solve these issues and move forward with their lives.”
Click here to read the full 2024 BC Consumer Debt Study report.
Click here to view and download the 2024 BC Consumer Debt Study infographic.
Key Takeaways from the 2024 BC Consumer Debt Study
- 79% of British Columbians polled in the 2024 BC Consumer Debt Study said their mental health suffered because of being in debt.
- Debt-stress resulted in: constant worry about debt (reported by 84% of consumers); anxiety (78%); poor sleep (70%); alienation from family or friends (30%).
- 72% of individuals surveyed said overwhelming stress was how they knew their debts were becoming a problem.
- 41% of survey participants waited more than 2 years before seeking help with their problem debt.
- 56% of people said credit card debt was the main type of debt they had, and the top two direct main causes of debt reported by all consumers were: overextended credit due to financial mismanagement (27%) and using credit for essential costs of living income could not cover (24%).
How British Columbians Are Accumulating Debt
Consistent with past BC Consumer Debt Study statistics, the largest cohort (36%) of 2024’s study participants had between $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started their debt relief process, and 29% of consumers polled described their credit rating as ranging between ‘good’ to ‘excellent’ at the time of their insolvency filing.
Four of the five top-reported causes of problem debt may be connected to conditions or events outside consumers’ 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 attributed the direct main cause of their debt to overextended credit due to general financial mismanagement.
Three types of debt that Licensed Insolvency Trustees often categorize as high-risk due to the costs of borrowing and likelihood of balances becoming unmanageable were highlighted in the 2024 BC Consumer Debt Study:
- Over half of individuals polled (56%) indicated 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%).
Most participants in the 2024 BC Consumer Debt Study (94%) said their household has been impacted by recent inflation increases:
- The largest cohort (85%) said inflation has their household now spending more on necessities such as food and gas.
- 53% of participants said their household is now spending more on shelter and utilities, and 51% said their household is no longer able to accumulate as much savings.
How Problem Debt is Affecting British Columbians
Individuals who participated in the 2024 BC Consumer Debt Study reported a devastating range of impacts from debt, affecting virtually all aspects of everyday life:
- Over 7 in 10 people surveyed (72%) said overwhelming stress was how they knew their debts were becoming a problem.
- Other top-reported signs of a debt problem that consumers identified included: Only making minimum payments (58%); seeing debt balances remain almost the same every month, despite making payments (55%).
Close to 4 in 5 people (79%) said their mental health suffered because of being in debt and 84% of individuals surveyed said they had a constant worry about debt:
- 3 in 5 of all individuals polled (60%) said their self-esteem suffered by being in debt; 78% had anxiety, 69% feelings of helplessness or hopelessness, and 61% depression because of debt stress.
- Roughly 1 in 7 people said they experienced suicidal ideation because of their debt-stress.
Nearly half (48%) of individuals polled also said being in debt caused their physical health to suffer, while close to one-third (32%) of consumers said their relationships suffered as a result of being in debt, and 29% said they had to put life events on hold being in debt.
What Consumers Did to Solve Problem Debt
Prior to seeking professional debt help from a Licensed Insolvency Trustee, consumers attempted to manage their debt with a range of actions, including many that required additional borrowing:
- Over 1 in 3 people surveyed (34%) tried to deal with their debts by applying to extend credit limits on existing debts.
- 26% of individuals 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.
- Over a third (33%) said they borrowed from family or friends to make debt payments.
- 10% of British Columbians polled said they attempted to deal with their debt by working with a credit counsellor, and 7% by working with a debt repayment agent.
Individuals who recently made a formal insolvency (debt relief) filing 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, reflecting that debt relief for consumers has changed remarkably, with Consumer Proposals now far outpacing bankruptcies as the debt solution of choice.
Why People Are Waiting to Seek Debt Help
Only 6% of consumers polled in the 2024 BC Consumer Debt Study said they sought help as soon as they knew they had a problem, and sadly the largest portion of individuals (41%) waited for more than 2 years before seeking help – a 51% increase since the 2018 BC Consumer Debt Study.
- Most survey participants (62%) say they waited to seek professional debt help because they wanted to manage debt on their own.
- More than half of consumers polled (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 significant issue in reaching individuals to offer support and solutions:
- Over 1 in 4 BC consumers surveyed (27%) say they delayed seeking help for their debts because they didn’t know where to seek help and 15% said they delayed because they had misinformation about how the Consumer Proposal and/or Bankruptcy process worked.
- Nearly a third of people (32%) said they waited to seek professional debt help because they thought there was no solution to their situation.
How Insolvency Has Influenced Financial Outlooks
Over 90% of the 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, and most individuals say that their experience receiving professional debt help also improved their finances and overall financial literacy:
- Two-thirds of survey respondents (67%) said getting professional debt help allowed them to improve their budgeting and/or savings skills.
- More than half of individuals polled (55% and 53% respectively) say they are now more confident in day-to-day financial management and have a better understanding about credit and borrowing.
Click here to read the full 2024 BC Consumer Debt Study report.
Click here to view and download the 2024 BC Consumer Debt Study infographic.
View the BC Consumer Debt Study series here.
For further details about BC Consumer Debt Studies or media inquiries contact Sands & Associates President Blair Mantin.
About Sands & Associates and the BC Consumer Debt Study Series
Since founding in 1990 Sands & Associates has grown to become a leader in BC’s debt help industry, now the province’s largest firm of Licensed Insolvency Trustees dedicated to debt services for consumers and small business owners. Sands & Associates’ “debt smart with heart” approach is at the core of our award-winning service, and we believe this is crucial to providing support to individuals in need.
It is our goal to promote open, honest conversations and increase awareness and support for consumers experiencing financial challenges and the BC Consumer Debt Study series offers a unique opportunity for understanding these deeply personal and often private struggles.
You are not alone in dealing with a debt problem, and you have options to clear debt and move forward with a financial fresh start. Connect with a local Sands & Associates expert today to take back control of your finances – book your free, non-judgmental debt consultation now.