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More than 50% of British Columbians are $200 per month away from financial insolvency: survey

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More than half of British Columbians say they are now $200 or less per month away from not being able to meet all of their bills and debt payments.

The MNP Consumer Debt Index, released Thursday, found that B.C. residents hovering close to financial insolvency have reached a five-year high.

This is also a 14-point jump since the last Debt Index survey was released in December.

April’s survey also found 27 per cent of British Columbians reported that they were already insolvent, with no money left at the end of each month to cover their payments.

Read more: Canadians fear debt almost as much as they fear death: survey

“Financial relief measures put in place as a result of the pandemic provided some breathing room over the last year, but now we’re seeing a quick reversal,” Linda Paul, a licensed insolvency trustee with MNP Ltd in the Lower Mainland said in a release.

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“The number of people in the province with virtually no wiggle room in their household budgets shot up significantly since December and has reached a five-year high. That suggests that many households in the province are feeling anxiety about making ends meet and we may see households falling behind on payments or defaulting on loans, mortgages, car payments or credit cards.”

On average, those surveyed said they had about $691 left each month after making their necessary payments and Paul said government aid programs and “debt holidays” are coming to an end and people are having to pay bills before they might get back to full-time employment.

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“Even though many are spending less and saving more, others may be pushed further into the red after job, wage, or small business loss,” she said.

Read more: Many British Columbians’ finances, debt worsening under COVID-19: poll

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Twenty-seven per cent of British Columbians said they have taken on more debt as a result of the pandemic, including using their savings to pay for bills, using credit cards more, using a line of credit, taking out a bank loan or deferring mortgage payments.

“Taking on more debt just to make ends meet makes households very vulnerable, particularly if and when interest rates increase. The debt may become unaffordable as the rate environment changes,” explains Paul.

A quarter of those surveyed said they plan on taking on more debt to pay bills over the next year, using high-interest options like credit cards or payday loan services.

Paul said anyone with a lot of debt should seek professional debt advice immediately before the situation becomes worse.

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The latest data, representing the sixteenth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between March 4-9, 2021. For this survey, a sample of 2,001 Canadians aged 18 years and over was interviewed. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. 

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