Canadian Household Debt – How Do You Stack Up?

Earlier in February, the McKinsey Global Institute released a report regarding debt and global economies, and after surveying 47 countries, listed seven with ‘potential vulnerabilities’ when it comes to household debt. Among these seven is Canada, and the report argues that this Canadian household debt could prove disastrous, leading to further financial instability and a consumer spending slowdown.

A recent Globe and Mail article touched on this report, stating that “As Canada’s economy begins to slow, the country’s growing household debt burden is raising new concerns as it outpaces that of most developed countries. In fact, Canada had the second-biggest jump in household debt-to-income ratios of any country other than Greece between 2007 and the second quarter of 2014.”

You can view the entire report here.

For many Canadians, this report likely does not come as a shock - a vast majority carry consumer debt loads that are significant. Canadian household debt has become a major source of stress for many individuals and families alike, leading either to a cut in consumer spending (which the report suggested as a potential outcome), placing some financial responsibilities before others, or both.

If you find yourself in the Canadian household debt camp that is not so much swimming as treading water, it might be time to consider some alternatives. A debt consolidation, consumer proposal or bankruptcy can be a lifesaver when it comes to getting your finances back on track and eliminating financial stress from your life.

Tired of being part of these startling statistics? DebtCare can help. Call us today to find out about the options available to help lower your consumer and household debt: 1-888-890-0888.

Who Is Spending? Canadian Household Debt

Canadian consumer debt has continued to rise over the last few months, and although the delinquency rate has dropped, the spending has not. But since the delinquency rate has dropped, that means that individuals are more conscious of the need to keep up with paying off Canadian household debt – which is always a good thing.

So who is spending, who is responsible for dealing with household debt, and how do Canadians feel about their retirement financials? Check out this great infographic “He Debt, She Debt.”

According to the survey, both men and women say debt repayment should be a top priority, but there were a few interesting findings:

• Who is responsible for household debt?

• It is equal: 39% men vs. 54% women
• Me or mostly me: 56% men vs. 36% women
• My partner or mostly my partner: 4% men vs. 10% women
• Are you confident you’ll be debt-free at retirement?
• 55% of men and 49% of women said yes
• Do you find the idea of retiring with debt stressful?
• 60% of women and 42% of men said yes

Where do you stand as far as these survey results? Are you the big spender in your household? Do you feel as though retiring without debt is a feasible achievement?

If Canadian household debt seems to be a stressor, no matter who is responsible, or if you feel like retiring without debt might be an impossible goal, please call DebtCare Canada today. We can help you deal with your debt problem and get you back on a firm financial footing: 1-888-890-0888.

Say Goodbye to Credit Card Debt

With Canada’s consumer debt continuing to rise, although at a slower rate, it is no surprise when individuals come to us looking for credit card debt relief. The ease with which credit card companies extend credit, even to those with less than stellar credit, and with credit limits far exceeding what is necessary, it can be really easy to get in over your head relatively quickly. And with all of that spending, at month’s end, or a few months down the road, you might find yourself in the common position of wondering how you are ever going to pay down those debts!

Because they carry such high interest rates, and because the balance is revolving (meaning once you have paid off a portion, that credit becomes available again), credit cards are often the most difficult types of debt to pay off. But there is always hope. Start by paying more than the minimum payment each month, as much as you can. The minimum payment is typically little more than interest, and therefore not much is actually going onto the principal.

Don’t have enough extra each month to pay that much more than the minimum on more than one card? One of the best ways to deal with this situation is to start with the card with the highest interest rate and pay as much as possible. Since this card is costing you the most, work harder at paying it off. Once it is paid off, move to the one with the next highest rate.

So how can you cut down that monthly spending in order to find the cash to add to each month’s payment and cut down your credit card debt? What about taking advantage of these useful, but all too often ignored, money saving strategies:

-        Have a yard sale – you have all of that stuff lying around anyways – why not get rid of it and make some money in the process.

-        Save your change – when you empty your pockets, instead of using that money tomorrow, put it in a jar and save it up – you might be surprised how fast it actually grows.

-        Make your own lunch and brew your own coffee – sure, this might mean a bit of extra time and effort, but just think about the fact that that $2 a day coffee habit is actually costing you $40 a month!

-        Coupon clip – check the flyers, look online, and search for deals in store. Again, this might take a bit of extra time but the savings in your pocket can actually be well worth it!

-        Visit the library – don’t think that the theatre or overpriced bookstore are your only options for entertainment. Your local library probably has a great selection that is largely underused – and free!!

-        Plan your meals and groceries in advance – buying everything at once lets you take advantage of bulk buys, and can mean useful ways to stretch the budget and the food.

Credit card debt can be a nightmare to deal with, but with the right support and guidance it is possible to pay it off. DebtCare can help. Call us today at 1-888-890-0888.

Not So Happy Canada Day When it Comes to Canadian Consumer Debt According to Yahoo Finance

Last week we celebrated Canada Day and that means that half of 2014 is officially over. Just like New Year’s Day, this holiday often leads people to think back on the past 6 months – have you evaluated your current debt load? Well, if you haven’t, Yahoo Finance has, and has discovered just how much Canadian consumer debt is impacting the nation’s economy.

Check out this recent release from Yahoo Finance, “Household Debt Overhang Holding Back Canada's Economy”: https://ca.finance.yahoo.com/news/household-debt-overhang-holding-back-124451782.html. According to the article, Canada was able to overcome the recent financial crisis thanks in part to consumer spending. A hot housing market and consumer spending meant that our economy was able to rebound far quicker than the U.S., but at a substantial cost. Now, thanks to high Canadian consumer debt, individuals are spending less and paying off more, meaning that economic growth won’t reach the levels initially anticipated.

Furthermore, “Canada's disposable household debt-to-income ratio is at a near-record high of 164.0 percent. By contrast, U.S. households reduced their indebtedness in the wake of the crash.” Clearly there are drawbacks to having dealt with the crash in a way that meant less economic meltdown for the average Canadian.

If you are one of the many Canadians whose spending has led to a mountain of debt that now seems unmanageable, it might be time to start thinking about some viable solutions. Don’t get stuck barely able to make ends meet because of the interest on credit cards and the looming collection action being threatened by your creditors.  Get in touch with a company today to find out what options exist to help you regain control of your finances.

For more about Canadian consumer debt and taking back control of your money please contact DebtCare Canada today by calling 1-888-890-0888.

Statistics Canada: Report on Current Canadian Consumer Debt Levels

Statistics Canada released its latest report on figures regarding personal wealth and debt levels recently, and the numbers are not as promising as some financial experts would like – in many cases they are actually worse. What are these numbers, and what do they tell us about Canadian consumer debt levels?

By the end of the second quarter of 2013, Canadian mortgage debt had reached $1.1 trillion – but this number is not included in consumer debt – or rather, debts such as credit cards or personal loans. In contrast, consumer debt reached a high of $500 billion.

A key measure of consumer debt is the debt-to-income ratio for each household. This means the amount of household debt compared against disposable income. As StatsCan reported, the second quarter of 2013 hit a record high of 163.4% – that is up from 162.1% for the first quarter of last year, and is a reversal of the trend that saw the ratio decline in the previous 2 quarters.

So what do these numbers actually mean? Well, according to financial experts, this is a good indication that Canadian households are still spending, on credit, but at a slower rate, which is a good thing. That being said, the key factor here is that the spending continues, meaning Canadian consumer debt levels continue to grow.

Also, while some experts say that this debt is not unmanageable, a recent Royal Bank survey conducted by Ipsos Reid found that consumer debt is still keeping many Canadians on edge – 38% polled stated they were anxious about their current debt load. If you find yourself in this category you are clearly not alone. And although experts seem to think that Canadians are going to continue to curb their spending, this may not be as feasible for all as they would perhaps like.

So, how do you measure up and what are your options? Are your debt levels on par with the average Canadian, or are you a bit more on the ‘stressed’ side. If your debt is keeping you up at night it might be time to think about a different solution. And again, you are not alone here either. The same RBC poll found that many Canadians are going a bit farther than just making a budget or using different tactics to decrease debt, stating debt consolidation has become a big favourite for many looking to reduce their overall debt load and save on interest.

Want some help coming up with a solution – DebtCare can discuss the many options regarding Canadian consumer debt and how to eliminate yours. Call us today at 1 (888) 890-0888 or visit us online at www.debtcare.ca   

BOO! Don’t Let Your Consumer Debt Scare You – Fix It!

This time of year it is hard not to find yourself celebrating the scary season, whatever that may involve. However, the scare factor should have everything to do with ghouls and goblins – but nothing to do with your consumer debt. If your debt scares you – no matter what time of year it is – it might be time to consider taking control of your finances and getting out of debt.  

What is consumer debt – is it just debt? Well, no. Consumer debt refers to the debt accumulated through purchases which are consumable or do not appreciate in value. Credit products such as credit cards are the main conduit for this type of debt. Debt from other transactions, such as your mortgage, is not considered consumer debt.

Consumer debt is often the most troublesome form of debt, especially when it is debt owed on a credit card. This is because of the high interest rates charged by credit card companies. This interest, often around 20%, can make paying off debt very difficult, especially when you can only afford to make minimum payments. Don’t think it is a major issue? Most credit card statements will give you an approximate timeframe as far as when the debt will be totally paid off by paying only the minimum payments. Take a look at that number – it just might scare you into action.

If you are finding it difficult to decrease your balances, or if you continue to rack them up and then have trouble meeting the minimum payment requirements, a smart idea is to get some help – you don’t have to do it alone. Visiting a debt reduction company with experience helping people deal with debt can help you get things back on track. Your debt reduction solution may involve debt consolidation, credit counselling, a consumer proposal or bankruptcy – it all depends on your individual financial situation. Sitting down with a professional will help you to establish a plan to get things going. This will help to stop or avoid harassing calls from collection agencies and any future (or current) enforcement action, such as wage garnishments or property liens.

Stop ignoring problem consumer debt – and don’t let the thought of dealing with it frighten you. Get the help you need today to get back on the road to financial success.

For more information about dealing with your consumer debt please contact DebtCare Canada today by calling 1-888-890-0888 or visit www.debtcare.ca. 

Getting Out of Debt Blog Series #4: Debt Settlement

With the average consumer debt load in Canada at an all-time high, it is unfortunately not surprising to see companies popping up everywhere offering solutions to your debt problems through a debt settlement. But be wary; unlike consumer proposals, bankruptcies and debt consolidations, debt settlements, depending on the company, can sometimes come with more negatives than positives. This 4^th blog in our ‘getting out of debt blog series’ looks at the debt settlement, giving you the information you need to help you make the right decision about solutions to your debt problems.

What is a debt settlement? A debt settlement is just that – the settlement of your debts. This settlement involves a negotiation with your creditors to reduce the amount of the debt you are required to pay off.

A debt settlement will in almost all cases involve paying the settlement amount in a single instance. In most cases the collection agency representing your creditor can accept less money from you than you owe to settle your debt. We have seen collection agencies settle debt for as little as 50% of the amount that was owed. That being said, regardless of whether it is the collection agency or a creditor that is willing to consider a debt settlement, they will want to receive the settlement money in full.

Often consumers won’t have the money to pay the settlement in full. This has spawned an entire industry of debt reduction companies. These companies will accept monthly installments from you over time with the promise that once you have remitted enough money they will settle your debts. This is a risky proposition. Instead, do your due diligence because if you are remitting to a debt reduction company and they go out of business in the future your money may not be secured.

There are several reputable companies out there that offer financial consulting and can help you to settle debt with your creditors without risk to you. These companies, experienced with consumer debt solutions, will represent you fairly and help you establish a plan to settle your debts without you giving money to them on a monthly basis.

Avoid being taken advantage of by doing research and avoiding companies who bill themselves as debt reduction specialists or companies. Look for positive reviews from consumers and see how much of an online image they have established to ensure that you are working with a professional organization that has staying power.

How will a debt settlement affect your credit? As with any debt solution, a debt settlement is recorded on your credit report and may bring down your score. That being said, if you are considering debt settlement the impact on your credit rating is likely no worse than the damage already done. Once you have settled your past bad debt you can begin the process of rebuilding.

If you are considering a debt settlement as a way of getting rid of your debt, there are a number of things to consider, but the most important is the company itself. Just because a company promises to settle your debts it doesn’t mean that they will do so the right way. Make sure that you do your research and make inquiries. Working with a trustworthy debt settlement company will make all the difference, keeping you protected throughout the process.

If you need help getting out of debt or would like to find out more about your debt settlement options, please contact DebtCare Canada today by calling 1-800-890-0888.

The Globe and Mail Reports on Canadian Consumer Debt

The Globe and Mail recently reported on the status of Canadian consumer debt levels, stating that Canadian household debt continues to grow. With that said, individuals seem to be obtaining less credit and the Bank of Canada reports being less concerned about this debt than in years past. 

However, a report from Statistics Canada calculated the average household debt at $164.97 for every $100 of disposable income, slightly higher than the analysis from 3 months previous. And just because the head bank doesn’t seem too concerned, it does not mean that Canadian consumer debt levels are not at a record high – they are.

It has become quite common over the past several years to hear these reports about Canadian consumer debt levels no matter where you go. If you are not in debt often these updates seem irrelevant and are easily pushed aside. However, if you are in debt these updates can often leave you stressed about your own financial situation.

If you find yourself getting shaky or stressed out with each report like this one, it might be time to recognize that you need some help with reducing your debt. Instead of trying to ignore the signs that your debt is becoming unmanageable or hoping that if ignored the problem might go away (it won’t), why not consider working with a professional to get rid of your debt.

How can a professional debt consultant help? After an initial consultation which will involve assessing your debt, your re-payment behaviours, and your monthly income, a debt consultant will be able to discuss with you the various options which exist to help you get out of debt. They can also help you to establish a budget that is realistic while at the same time focusing heavily on repaying the money that you owe to your creditors.

Some options which may exist include debt consolidation, consumer proposal or making settlements with your creditors. All three of these solutions come with their own benefits and it pays to consult with a professional to best determine which option is the right one for you. Some might even offer the ability to settle what you owe with creditors at a much lower amount – saving you money.

If you find yourself constantly trying to avoid the reports on rising Canadian consumer debt levels, change your perspective and start looking at it as a motivator to get your own debt under control.

For more information about how you can reduce your debt, please contact the professionals at DebtCare Canada by calling 1-800-890-0888, or visit us online at www.debtcare.ca.