Soaring energy bills, skyrocketing food prices and rising interest rates, coupled with pandemic-related losses and the end of government support programs, have left many British Columbians struggling financially. As households begin to feel the financial toll, many are at a loss when it comes to finding help. One in three (36 per cent) say they don’t know how to get out of debt or where to turn for relief, according to a recent poll conducted by Ipsos on behalf of MNP LTD. Compared to the other provinces, British Columbians are the most likely (59 per cent) to say they have difficulty trusting professional companies to help them get out of debt.
“Individuals who are not able to cope with their debts and are financially vulnerable need to know who they can trust for professional debt advice – that is critical,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD. “Remember that licensed insolvency trustees are the only federally-regulated debt professionals who are ethically and legally bound to explain all of the debt-relief options available based on the individual’s financial situation and provide them with unbiased advice.”
A lack of financial literacy could put indebted British Columbians at more risk and intensify the need for debt-relief. With interest rates likely to continue upward this year, one in four (24 per cent) say they don’t have a solid understanding of how interest rate increases impact their financial situation.
Paul notes that many individuals hesitate to seek out financial assistance and suffer needlessly due to the stigma of debt. Among the provinces, British Columbians and Atlantic Canadians are the most likely (52 per cent) to say they would be embarrassed to seek help if their financial situation was bad enough to consider bankruptcy.
While nearly half of British Columbians (47 per cent) know that licensed insolvency trustees are the only debt professionals who can provide debt-relief options like consumer proposals and bankruptcies, four in ten (43 per cent) – more than any other province – believe that there is no difference between credit counsellors, debt consultants, and licensed insolvency trustees.
Licensed insolvency trustees are the only professionals authorized to administer consumer proposals and bankruptcies, offer legal protection from creditor actions, and can stop or prevent collection calls and wage garnishments.
“Know that all debt advice is not created equal. British Columbians should be wary of unlicensed insolvency service providers who may make bold statements promising to make them debt-free. Only Licensed Insolvency Trustees can employ the federal Bankruptcy & Insolvency Act to discharge individuals from debt,” said Paul.
Those able to overcome their anxieties and reach out for help may face other hurdles in their search for debt help. One in four (27 per cent) British Columbians say they have paid for ineffective financial advice.
“We encourage individuals to obtain a free, confidential assessment of their financial situation from a Licensed Insolvency Trustee, who will detail all of the debt-relief options available. This is particularly important because each debt situation is unique and requires a customized approach,” says Paul.
Debt relief options can include striking a deal with creditors through an informal debt settlement, consolidating all debts into one monthly payment, making a debt repayment plan through a consumer proposal, or declaring bankruptcy.