Wary of seeking help

Ipsos survey shows almost half of Atlantic Canadians would be too embarrassed to reach out if in serious debt

A Charlottetown licensed insolvency trustee says the people most in need of help with their debt are the least inclined to ask for it.

Walter MacKinnon is referring to the results of a new survey conducted by Ipsos on behalf of licensed insolvency trustees, the folks who help when financial woes lead to bankruptcy.

That survey shows almost half of Atlantic Canadians (47 per cent) say they would be embarrassed to get help if their financial situation was bad enough to consider bankruptcy.

More than a quarter (28 per cent) of survey respondents say that the stigma surrounding bankruptcy prevents them from seeking help.

“Dealing with consumer debts can be extremely isolating,’’ MacKinnon said. “Guilt and shame prevent many people from talking about it or getting help.’’

While 61 per cent of Atlantic Canadians rate their personal debt situation as bad, the survey revealed many don’t know how to improve it.

One in three people (32 per cent) said they don’t know how to get out of debt or where to turn for help. And, there is a lack of trust among people in the region when it comes to debt relief professionals. Half of Atlantic Canadians say they have a hard time trusting professional companies to help them get out of debt.

“The lack of trust may be a result of a lack of awareness about debt relief options available,’’ MacKinnon said. “There is a regulated system in place to help severely indebted individuals regain financial stability.’’

MacKinnon said people should be wary of any companies that aggressively market quick-fix debt forgiveness.

“Licensed insolvency trustees are the only professionals authorized to offer relief options such as consumer proposals and bankruptcies.’’

The latest official figures from the Office of the Superintendent of Bankruptcy (OSB) show that the number of P.E.I. residents who filed for bankruptcy or a consumer proposal in the first quarter of this year was down more than 10 per cent compared to the same quarter of last year.

“The number of people filing is on the decline, but this doesn’t necessarily reflect the debt challenges in the province. So many people struggling wait until they are in a dire situation before finally seeking help. Many may be even forgoing basic necessities to avoid filing a consumer proposal or bankruptcy,” said MacKinnon.