British Columbians still getting deeper in debt

Rising interest rates adding to our debt load, says Consumer Debt Index survey

An anticipated further interest rate hike this year will create increased financial turbulence for the individual pocketbooks of British Columbians.

According to the latest Consumer Debt Index report, one-third of British Columbians expressed fears of another interest rate increase would move them closer to bankruptcy, an eight-point rise since June, and the highest increase registered compared to other provinces.

Nearly half of British Columbia CDI survey respondents say they are becoming more concerned about their ability to repay their debts if interest rates continue to climb, and 45 per cent say they already are feeling the affects of higher current interest rate levels.

“With the cost of living in the province trending upward along with the pace of debt accumulation, we are going to see a more immediate and significant effect on borrowers with rate increases in the future,” said Linda Paul, a Licensed Insolvency Trustee with MNP Ltd., Canada’s largest insolvency practice.

Paul said people generally had grown complacent with budgeting because of the easy availability of credit and low interest rates over the last decade, but as the cost to service those debts increases the financial hit on households can be sobering.

RELATED: Reports of personal bankruptcy on the rise

“The biggest regret we hear from people is about making those impulse buying decisions in the moment without thinking through the consequences,” Paul said.

She cites the example of whipping out your debit card on a daily crisis to buy that cup of coffee, a seemingly minor purchase that adds up over time.

“It may not seem like much at $5 a day, but add that up over five years and suddenly that amounts to $9,000. So it pays to brew your own at home.”

She said while bankruptcy filings in B.C. are actually done two per cent over last year, but she suspects as interest rates go up people often turn to the equity in their homes to keep themselves financially afloat in the face of mounting debt.

RELATED: Rising personal debt could drag on long-term growth

She notes while Okanagan real estate sales are down, so far housing prices have remained stable, while prices have declined in the Lower Mainland.

“As prices fall, that ability to draw out wealth from your equity becomes not as readily accessible as it used to,” Paul said.

“And the new mortgage rules in place have made it harder to buy homes for first-time buyers to begin with.”

Paul said the best advice she can give is to seek out financial debt planning help immediately when your financial tables start to turn in a negative way, understand the cost of borrowing and live within your cash financial means.

“My biggest takeaway from this latest (Consumer Debt Index) report is don’t wait for things to snowball out of control. That often limits your options and you end up dealing with garnishee wages or legal actions filed against you.”



barry.gerding@blackpress.ca

Like us on Facebook and follow us on Twitter

Just Posted

Terrace Industrial Park build-out continues

Containerized LNG, forestry among potential manufactured goods

Body, burning truck found near Dease Lake

RCMP unsure if the two separate discoveries are related

CN train derailment cleared between Terrace and Prince Rupert

The CN mainline is now open, following a train derailment mid-way between… Continue reading

President and CEO leaving Coast Mountain College

Burt will say goodbye to CMNT come September

‘Tent city’ and homelessness a polarizing issue in Terrace

City of Terrace gives an update, says province should step in to help with housing, mental health

Rich the Vegan scoots across Canada for the animals

Rich Adams is riding his push scooter across Canada to bring awareness to the dog meat trade in Asia

A year later, ceremony commemorates victims of the Danforth shooting

It’s the one-year anniversary of when a man opened fire along the bustling street before shooting and killing himself

Japanese Canadians call on B.C. to go beyond mere apology for historic racism

The federal government apologized in 1988 for its racism against ‘enemy aliens’

B.C. VIEWS: NDP pushes ahead with Crown forest redistribution

This isn’t the time for a radical Indigenous rights agenda

Two dead in two-vehicle crash between Revelstoke and Golden

RCMP are investigating the cause of the crash

Ottawa fights planned class action against RCMP for bullying, intimidation

The current case is more general, applying to employees, including men, who worked for the RCMP

Alberta judge denies B.C.’s bid to block ‘Turn Off the Taps’ bill

He said the proper venue for the disagreement is Federal Court

Most Read