April MNP Consumer Debt Index (3 Minute Debt Break)

The latest MNP Consumer Debt Index has rebounded significantly to 91 points — an eight-point jump since last quarter after a full year of low scores.

Conducted quarterly by Ipsos on behalf of MNP Limited, the Consumer Debt Index tracks Canadians’ attitudes about their debt and ability to meet their monthly payment obligations.

Recently, there's been a noticeable shift in how Canadians view their debt. About 27% of Canadians feel their current debt situation has improved, an increase from the previous year, while only 16% feel it has worsened—a significant drop. As interest rates may decrease, 41% of households are less worried about their debt levels, and fewer regret the amount of debt they've taken on, with only 44% expressing concern.

Importantly, a quarter of Canadians now feel better prepared to handle an interest rate increase of one percentage point, and similarly, about 24% believe they can manage an additional $130 in interest payments. Despite these positive trends, many Canadian households still face challenges, including mortgage renewals, the lasting financial impact of the pandemic, and rising living costs.

Concerns about debt repayment ability have slightly eased, with 58% of Canadians worried about meeting their financial obligations, down from last quarter. However, nearly half of the population is just $200 away from financial distress, and 54% would face financial trouble if interest rates rise significantly.

Navigating debt issues is a common struggle, and it's crucial not to face them alone. Early intervention by professionals can prevent situations from worsening. Delays in seeking help due to shame or guilt often lead to more severe consequences, such as aggressive collection efforts and scams.

The cost-of-living crisis continues to pressurize personal finances significantly. This is evident as nearly half of Canadians feel financially pressured by social obligations, with 75% of those with poor debt ratings feeling particularly vulnerable. Young adults and those aged 35-54 are the most stressed about these financial demands.

While a third of Canadians say their financial situation has rebounded since the pandemic began, an equal number report being worse off than before the pandemic. The financial strain is especially prevalent among those aged 35-54 and those with lower incomes.

Despite the gloomy outlook, there is a pathway to recovery. Seeking advice from a Licensed Insolvency Trustee can be an essential first step. These professionals offer personalized, unbiased advice and are the only federally regulated debt relief experts who can navigate all available options, including Consumer Proposals and Bankruptcy. They also provide protection against debt collectors and help discharge debts. MNP's team of trustees offers free consultations to help Canadians start their journey toward debt relief.

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