We’re number 1!
The province of British Columbia has the highest level of personal debt anywhere in Canada and it’s still growing.
With incomes low and house prices high, it’s not an entirely unexpected result. But even if you remove house debt we have very high levels. Not including mortgage debt, simple consumer debt averages $37,879 in BC.
And that of course has led to a rising number of bankruptcies. In the last four years bankruptcy rates across Canada have gone up 11%, here in BC the number is up 42%.
That Province article also talks about the ‘elation’ of declaring bankruptcy, but that usually only occurs after some one has used up all their other options and burnt up money they could have kept:
“People often come to see a trustee as a last resort, when credit is turned off and they can no longer borrow from one card to pay another,” Mantin says. “They come in and say ‘I regret that I didn’t know about these options sooner. All I’ve done over the last two years is tread water.'”
Frantic people make decisions that will compromise their future, Mantin says. One of the worst is cashing in RRSPs.
For one thing, only the last 12 months of RRSP contributions need be surrendered in a bankruptcy. And those who sacrifice an RRSP without learning to live within a budget are not facing the underlying issue, Mantin says.
“Unless they’re forced to make a behavioural change, I often find they’re in the same position a year or two later,” he says. “They’ve dealt with the short-term debt but haven’t solved the budget problem so they run their debts up again.”
Read the full article here.