A study conducted by Angus Reid for Credit Counselling Canada shows that more than 50% of the respondents indicated financial stability to be the top measure of financial health, and more than 42% stated that rising costs of living and housing had an adverse impact on their mental wellbeing.

20% Canadians spend 30%-50% of their income towards paying debt, and 10% spend more than 50% of their income on debt repayments. 77% cited the importance for credit card statements listing resources for safe and affordable debt. 40% indicated that their financial situation since the pandemic has adversely affected their mental health, with most of the population being Generation Z and Millennials. 84% of parents were worried about their child’s level of stress due to financial constraints. More than half of the survey participants were confident about bouncing back, and yet this requires help.

Financial pressures, pandemic stress, relationship issues, worry about who is influencing their children, job challenges – they have taken a toll on mental and physical wellbeing. While many turn to online streaming or music, they are merely distractions. Few seek the help of a professional counsellor, a vital step in beginning the journey back to emotional and mental health. Financial stress is the number one issue over which couples argue, and the last two years have been harsh for many.

When you need a caring voice and a listening ear, we are here for you. Our accredited non-profit counsellors can help create a customized plan to help you rebuild and reach your financial goals. Sometimes in life we need a friend, someone to walk beside us as we navigate the sharp financial curves. We want to remind you that you are not alone. Just leave us a message here, and one of our counsellors will be in touch.

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Consumer rights and debt is an increasingly important topic. As modern societies move toward open data movements in government, health care and banking, it’s important to note that North American society wasn’t built on a bedrock of a citizen’s right to know.

Sociologist Michael Schudson reveals how consumer rights movements between the 1950s and 1970s were based mainly on environmental activists’ demands, consumer advocates and investigative journalists.  Schudson outlines this drive toward modern transparency in his book, “The Rise of the Right to Know: Politics and the Culture of Transparency, 1945-1975.”

Schudson’s book campaigns for greater openness across several domains such as truthful communication in health care and transparency at all business and government levels. Today, in an era of constant information and the uncertainty amid COVID-19, it’s important to revisit this idea of consumer rights, specifically around consumer debt.

Most find it hard to open up about their finances and lack the courage to ask for help

Broadly, consumer rights ensure people obtain accurate and unbiased information and that they are not mistreated. Additionally, being informed on individual rights increases economic welfare. It also improves societal health by bolstering demand for openness and encouraging industries to make ethical progress.

In the consumer debt space, access to non-judgmental, confidential options is essential. Most find it hard to open up about their finances and lack the courage to ask for help. Despite a recent drop in consumer insolvencies, Canada is a heavily indebted nation. Unfortunately, that is not going to change anytime soon.

In a recent Credit Counselling Canada survey, Canadians revealed the issues they face when seeking debt assistance. The greatest challenge was a lack of focus on financial wellness and education (72 per cent). Next, a lack of transparency around fees (70 per cent). Then, concern about conflict of interest and a lack of transparency around an organization’s motives (69 per cent).

The survey also shows motivates people to get out of debt. It’s one of the oldest tropes in recovery, and a claim that’s been repeated for decades. You’ve got to hit rock bottom before you can change course. Strikingly, nearly four in 10 Canadians would have no idea where to turn when facing rock bottom.

More work needed to build awareness

Major work is needed to increase awareness of consumer rights around debt and debt relief. Canada is taking steps in the right direction. The Financial Consumer Agency of Canada recently renewed its Consumer Protection Advisory Committee, seeking to strengthen financial literacy and ensure appropriate regulations are in place. Nevertheless, more can be done.

Canada should look towards models in the U.K., Australia and New Zealand. Together these countries have invested upwards of $115 million in financial help services to supplement their COVID-19 relief packages. Although Canada has responded swiftly to address the immediate emergency, there is no long-term strategy to build Canadians’ financial well-being beyond the crisis. These countries have put the interest of indebted consumers first.  Moreover, they have developed a progressive framework of sustainable options, including the critical service of non-profit credit counselling.

Protecting the right to unbiased, safe and holistic debt relief requires action from several players. Governments, local community foundations and charitable foundations can band together to support the financial literacy goals of non-profit credit counselling. Funding can also help shift the economics of debt repayment through incentives for banks and credit unions to innovate.  Meanwhile, community centers and organizations can provide space and resources for consumer debt education. Finally, Canadians can seek out Canada’s non-profit, certified credit counsellors as a smart place to start.

It takes a collaborative approach

There is no panacea for Canada’s consumer debt problem. A cross-sector, collaborative approach that includes the non-profit, credit counselling sector is essential.

There is a clear path ahead.  One that involves a dual commitment to economic transparency and a progressive consumer debt approach. Egalitarian society advances when consumers have greater access to information and a protected set of rights. As we make our way through the second wave of the pandemic, we must strive to enshrine and elevate those rights.  Learn about Credit Counselling Canada’s bill of rights for Canadians in debt.

CEO of Credit Counselling Canada

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Overwhelmed by your debts? You are not alone! Consumer debt is at an all-time high in Canada. Whether you are in debt because of a job loss, illness, or overspending, debt can be burdensome. In your efforts to get back on track, it is important for you to understand the benefits of different debt relief options so you can make an informed decision.

Be aware of debt relief options that promise to be quick fixes. While it sounds lovely to have all your debts eliminated fast, you may live with long-term consequences. Be sure to check on the credentials of the business or agency including license, accreditation, certification of counsellors and other relevant qualification.

One of the options to release you from the majority, if not all your debt, is bankruptcy. This process takes place through a Licensed Insolvency Trustee. A consumer proposal might be another option offered through a trustee. This is a proposal made between you and your creditors that usually has you repaying a portion of the debt you owe rather than the full amount.

You might consider repaying your debts in full with the assistance of a debt repayment program. This program can be set up through a not-for-profit credit counselling agency. A debt repayment program is somewhat like debt consolidation. Your credit counsellor will work with you and your creditors to arrange your debts into one affordable monthly payment divided amongst your creditors. You will determine what you can afford for a payment each month, while still maintaining your living expenses.

Although all programs offer debt relief options, there are significant differences between the two industries:

As you seek out assistance, it is important that you have the proper information to make educated decisions. Our credit counsellors can help you explore all your options and lay out the pros and cons for each of them. The number one priority for all member agencies is being fully transparent and putting your best interests first. Find a credit counsellor in your area and get started today!

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