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Four in 10 Canadians don't know how to handle 'debt rock bottom': survey

Last Updated Sep 17, 2020 at 6:19 pm PDT

Taking on more credit card debt has not been the pandemic plan for many Canadians, data from TransUnion Canada suggested on Tuesday. Credit cards are displayed in Montreal, Wednesday, December 12, 2012. THE CANADIAN PRESS/Ryan Remiorz
Summary

Four in 10 Canadians don't know where to turn if debt becomes too deep: survey

One in four respondents say they would pretend their financial problems don't exist

VANCOUVER (NEWS 1130) — With so many job losses relating to the pandemic, dealing with debt is becoming a bigger issue for some people. A national survey shows some Canadians might not know where to turn if they get in too deep.

The Got Debt? Poll, an Angus Reid survey of 1,510 Canadians for Credit Counselling Canada, found nearly four in 10 respondents aren’t sure what to do if they hit “debt rock bottom.” But most Canadians say they understand the signs of nearing this, such as borrowing money between paycheques, going over credit limits, and getting calls from creditors.

Michelle Pommells, CEO of Credit Counselling Canada, says instead of facing root causes, some people end up taking on more debt.

“They max out one credit card, in order to deal with that, they get another credit card and they end up trying to pay Peter with Paul and end up getting into a really deep hole.”

She says the worst thing people can do is bury their heads in the sand and avoid financial troubles. The poll shows one in four people say they would ignore the problem.

However, almost two-thirds of the people say they feel they have the necessary knowledge and resources to recover from serious debt.

Most (79 per cent) say they would go to a trusted source, which could be a banker, family member, or friend. Seventy-two per cent say they would call a financial or debt professional.

And despite job losses during the pandemic, Pommells says it’s given some people a chance to recover.

“Because of the uncertainty, people are spending less, they’re saving as a result of that,” she explains. “The other thing is, with the lockdown, many people have been working remotely so costs they may have occurred for transportation, for gas, these have been savings.

Pommells suggests reaching out to non-profit credit counselling if someone needs help with finances.

“No debt situation is hopeless,” she adds.

-With files from Hana Mae Nassar