New Brunswickers going further in debt
A new report by Equifax Canada says that Canadians owe an average of $21,000 in consumer debt, not including mortgages.
New Brunswick's debt is even higher than the national average, at more than $22,500, a 5.1 per cent increase over last year. This is also the largest increase of all the provinces.
These debt levels have a significant impact on both the people that are struggling as well as on the economy as a whole.
Basically, it almost acts like a vacuum," says Larry Crandall, a licensed insolvency trustee with Grant Thornton. "It is siphoning this money out of our local economy, into the pockets of creditors."
"Anxiety and fighting"
Saint John resident Mary Bard has her debt under control now, but that wasn't always the case. Two years ago, she had reached rock bottom, and between her and her husband, they owed roughly $65,000.
"It feels horrible, it's just anxiety and fighting about money," she said. "I wanted my husband to go out west at the time so he could stay out there and we could pay it off, and that was causing a lot of issues and stuff."
Their debt accumulated slowly, first individually, and then collectively when they got married. They fell into the habit of using their line of credit for personal expenses, buying cars for work, until it became overwhelming and they decided to get help.
"When I would make this payment of six or seven hundred a month, because of the interest, it just wasn't going down," she said. "I said, 'it's going no place, we'll never not have this debt.'"
She spoke with a bankruptcy and insolvency firm, which helped negotiate her debt down to a manageable level and set up a five-year plan for paying it off. Bard has three years to go on that plan.
Seniors and youth also struggling
Bard was embarrassed to have gotten herself into this situation, but she is far from alone. Equifax Canada shows that Canadians owe a total of $1.6 trillion dollars in consumer debt.
Seniors are one of the groups struggling the most, accumulating 8.2 per cent more debt than they did last year.
"The majority of the seniors are on a fixed income," says John Eisner, president of Credit Counselling Service of Atlantic Canada, "and for those who had investments at some time and were maybe getting a seven to eight per cent return on the money, they are now getting one per cent."
"So what happens is there's a lot more seniors relying on credit just for their everyday living."
Adults between 18 and 25 are also bearing a large share of the load. The Equifax study found that the delinquency rate for that group increased significantly as well. In other words, millenials are struggling to pay back their debts.
"Our current credit market just makes it very easy to get credit." says Larry Crandall. "We need to go back, we need to start saving, we need to start planning our money, we need to start budgeting."
John Eisner agrees, and believes that the issue is largely that young people aren't getting taught the skills they need in order to manage their money.
"Why don't we teach this in school?" he asked. "This should be a part of the curriculum, because this is something everyone that has to contend with in their lives."
