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

Marston’s work receives the highest possible endorsement

Birthing and day-in-the-life photography her specialties

Chemainus Gardens residents thoughtful to pets

La Fleur organizes donation bin for four-legged friends of food bank recipients

Fayant receives a new lease on life from weight loss

Shedding that inner person on the verge of dying brings dramatic change

North Cowichan and the City of Duncan receive awards for financial work

Awards recognize excellence in financial reporting

Will Arnold spearheads drive to clean up Duncan neighbourhood

Will Arnold offers a grim assessment of the community he has fallen… Continue reading

Canada’s archive buys rare book that hints at Nazi plans for North America

The 1944 book may have served as a blueprint for a Nazi purge

47 men arrested by Vancouver police for allegedly seeking sex with teenage girls

Seven of those arrested have been charged as part of a two-month operation

B.C. hospital apologizes for veteran’s five-day hallway stay

Clinical director of Victoria General Hospital says case of retired veteran ‘definitely excessive’

Speaker Darryl Plecas says ‘justice’ needed for legislature employees

Plecas spoke to media at the opening of a pedestrian and cycling bridge in Abbotsford Wednesday

Advocate hopes B.C. legislature scandal leads to more transparency

‘Depressing’ that it takes a scandal to inspire freedom of information reform, says Sara Neuert

‘Dr. Lipjob’ avoids jail, gets 30-day suspended sentence

She will have to serve the 30 days in prison if she commits a breach during her two-year’s probation

Ex-Mountie involved in Taser death at Vancouver airport sues government

Kwesi Millington claims he acted in accordance with RCMP training

LETTER: Seniors home care, day programs expanding, Adrian Dix says

B.C. health minister responds to latest Seniors Advocate report

B.C. woman wins Instagram celebrity’s boob job contest

‘Kirill was here’ held a contest for women to win a boob job and a trip to Miami

Most Read