Consumer proposals spike in province

Islanders feeling regret of debt

More P.E.I. residents are filing consumer proposals compared to last year.

New statistics from the Office of the Superintendent of Bankruptcy shows the number of consumer proposals filed in the second quarter of 2018 are up 33 per cent compared to the same quarter last year.

For the 12-month period ending in June, total consumer insolvencies are down three per cent, while consumer proposals are up five percent.

“Not all people who are technically insolvent have reached out for debt help yet. Those who were already teetering on the edge financially are struggling even more now with interest rate increases,” said Walter MacKinnon, a Charlottetown-based licensed insolvency trustee with MNP Ltd.

MacKinnon pointed to a recent survey conducted by Ipsos on behalf of MNP showing that half of Atlantic Canadians are not confident they will be able to cover all living and family expenses in the next 12 months without going into further debt.

The survey also showed that; four in ten regret the amount of debt they have taken on in their life and three in ten are concerned with their current level of debt or worried that themselves or someone in their household could lose their job.

“People are often surprised that a job loss or other unexpected expense can lead to bankruptcy. The key is to have a budget and emergency savings plan ready to go — before it happens. If you’re not prepared, that can lead to a lot of debt regret,” said MacKinnon, who recommended having between three to six months of expenses saved.

“If credit is being used to pay other bills or to subsidize income, I recommend seeking out financial help right away. The worst mistake you can make is waiting too long to ask for help and allowing your debt to spiral out of control.”

Licensed Insolvency Trustees are the only debt professionals who offer a full range of debt relief options and can guarantee legal protection from creditors through consumer proposals and bankruptcies.

MNP Ltd. offers free consultations to help individuals understand their debt relief options including consumer proposals, debt consolidation, credit counselling, informal debt settlements or bankruptcy.

The survey was conducted between June 15 and 19 and sampled 2,001 Canadians from the Ipsos I-Say panel online.

The precision of online polls is measured using a credibility interval.

In this case, results are accurate to within plus/minus 2.5 percentage points, 19 times out of 20.