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

COS urges compliance in wake of province-wide drive for enforcement

The COS has undertaken a province-wide project focused on enforcement as well as education.

B.C. offers early retirement, training fund for forest workers

Communities eligible for $100,000 for permanent closures

UPDATE: Missing mushroom picker located in Anahim Lake area

The mushroom picker was from Ulkatcho First Nation

Prince Rupert’s ferry issue is a North Coast issue, MLA Rice

Prince Rupert not alone in fight to save ferry to Ketchikan: Alaskan Rep. Ortiz

First Nations given max compensation for Ottawa’s child-welfare discrimination

2016 ruling said feds didn’t give same funding for on-reserve kids as was given to off-reserve kids

‘I shouldn’t have done it,’ Trudeau says of brownface photo

Trudeau says he also wore makeup while performing a version of a Harry Belafonte song

35 of 87 dogs in 2018 Williams Lake seizure were euthanized due to behavioural issues, BCSPCA confirm

The dogs did not respond to the behaviour modification and remained terrified of humans

B.C. ‘tent city’ disputes spark call for local government autonomy

UBCM backs Maple Ridge after province overrules city

B.C. drug dealers arrested after traffic stop near Banff turns into helicopter pursuit

Antonio Nolasco-Padia, 23, and Dina Anthony, 55, both well-known to Chilliwack law enforcement

B.C. MLA calls on province to restrict vaping as first related illness appears in Canada

Todd Stone, Liberal MLA for Kamloops-South Thompson, introduced an anti-vaping bill in April

Chilliwack woman wins right to medically assisted death after three-year court battle

Julia Lamb has been the lead plaintiff in a legal battle to ease restrictions on Canada’s assisted dying laws

B.C. bus crash survivor petitions feds to fix road where classmates died

UVic student’s petition well over halfway to 5k signature goal

Most Read