Despite their concerns, too many Canadians say they are too ashamed to seek assistance
Canadians owe $2.4 trillion but too few of those struggling with debt are seeking professional help.
A new report from BDO Canada reveals that even as the cost-of-living crisis impacts more households, 56% of Canadians say they are finding it hard to talk about their financial situation with family and friends.
The Leger survey of over 1,500 people forms the basis of BDO Debt Solutions’ Debt Stigma Survey, an extension of the firm’s annual Affordability Index, and found that 38% of those who have no plans to discuss their debt the main barriers are fear of judgement and feeling ashamed or embarrassed, 35% are worried about privacy, 31% think people will assume they want to borrow money from them, and 29% don’t want to be a burden on their loved ones.
Among the financial topics that are hard to talk about:
- 86% say it would be difficult to admit they can't afford their grocery bill
- 85% would have difficulty discussing with family or friends that they have too much debt and don't know what to do about it, and ask for help
- 84% of respondents would find it difficult to tell a family or friend that they can't afford their rent or mortgage, and that they are overwhelmed by credit card debt
However, 89% say they would admit to family and friends that they wouldn't be able to participate in a planned event if they couldn't afford it.
"Most people find it very difficult to talk about debt and the financial challenges they're facing, let alone the strategies for overcoming debt," says Nancy Snedden, National Leader of the BDO Debt Solutions practice. "As a result, a lot of people who are struggling feel lost and isolated, making their situation even more stressful."
Younger Canadians (aged 18-34) are most likely to be struggling with 64% concerned about their current levels of debt compared to 40% of over 55s. Knowledge gaps and low financial literacy are among the key issues for many among the younger cohort.
A recent Advocis poll of Canadian financial advisors and financial planners reveals a rising problem with consumers unable to meet their monthly financial obligations, potentially destroying credit worthiness and long-term financial security.
Unsure of solutions
The survey also found that more than half of those of all age groups who are concerned about their debts don’t know where to go to get help with their financial situation or don’t want to talk about it.
Women are more likely to say this than men and are also more likely to cite embarrassment about having money conversations.
Older generations are also not discussing finances with the next generation. Just 22% of over 55s said they were comfortable talking about debt with their children.
"The results of our BDO Debt Stigma Survey clearly affirm a sense of shame and embarrassment among those burdened with affordability challenges and debt," adds Snedden. "At BDO, we always encourage those struggling with debt to talk to someone they can trust – a friend, a family member or a licensed professional like a Licensed Insolvency Trustee. Talking about debt becomes much easier when the conversation focusses less on shame and more on resources and solutions."
The importance of addressing debt concerns was highlighted in the latest official insolvency stats with 331 Canadians filing for insolvency every day during the third quarter of 2023.
