With debts soaring, admitting needing help is vital, but many are too embarrassed
The long-term financial future of millions of Canadians looks set to include the burden of debt.
With consumer debt above $2.5 trillion and insolvencies rising year-over-year, two in five respondents to a new poll say they don’t think they will ever be debt free, and the perceived shame of getting help is a key part of why.
Insolvency firm MNP Ltd. commissioned the Ipsos research which revealed that despite 43% of respondents saying they need help to deal with their debts, 48% said they were too embarrassed to ask for help, with younger Canadians (aged 18-24) even more likely (61%) to say this.
For this young cohort, 51% think they will never be debt free (well above the 34% overall).
One-third (35%) of Canadians are afraid that pursuing debt relief could lead them to lose their home, while more than half (54%) are concerned about the impact bankruptcy would have on their credit score.
But with the firm’s recent research highlighting a worsening personal debt rating for Canadian consumers, the risk of doing nothing as debts pile up is a serious risk to financial security. Even among the 80% of poll participants who don’t think there is a stigma to asking for help, 40% say they stigma of bankruptcy would make them ashamed to seek advice.
“It’s troubling that while most Canadians agree there is no shame in seeking debt help, many aren’t willing to act on their own advice,” said Grant Bazian, president of MNP. “It’s important to remember you’re not alone in facing financial difficulties. There’s no shame in seeking help – life events like job loss, divorce or health issues can happen to anyone and contribute to financial strain.”
Bad choices
For those grappling with debts, their behaviour often does not help their situation, the study found.
In the last year, one-quarter of respondents said they have only paid the minimum payment towards the balance on their credit card and one in five have delayed or skipped a bill payment, deepened their credit card debt, or have paid the minimum payment on their line of credit.
“When people avoid talking about their debt and delay seeking help, they often resort to spending and using credit just to keep up appearances in social settings, which only deepens their financial struggles,” explained Bazian.
