Survey finds 1 in 5 Canadians will need to liquidate assets to pay off debt
Published Tuesday, March 12, 2019 8:48PM EDT
One in five Canadians with debt say they will need to liquidate their assets to help pay it off or pay it down this year, a new survey has found.
According to the 2019 Household Debt survey, which was conducted for Credit Canada and the Financial Planning Standards Council (FPSC), many Canadians are struggling to pay their bills and are borrowing more money to deal with their debt.
About 19 per cent of survey respondents said they will have to liquidate assets to pay down that debt, including cashing in RRSPs, getting a second mortgage or selling a vehicle.
“People are looking to take on more debt in 2019. (That) is just making a bad situation worse,” Adriana Molina, a spokesperson for Credit Canada Debt Solutions said.
The need to liquidate debt is significantly higher among men and those with children under the age of 18, the survey said.
The survey also found that nearly two thirds of Canadians with debt anticipate taking on new forms of debt in 2019. This can include acquiring a new or increased credit card balance (23 per cent), a line of credit (15 per cent), a vehicle loan or lease (13 per cent) or a mortgage (12 per cent).
Those under the age of 55 are also significantly more likely to anticipate new forms of debt, the survey found.
Credit Canada said that no matter a person’s financial situation, there is always a way to reduce debt.
“The good news is that we do have lots of resources available and there is always going to be a solution to every problem we see,” Molina said.
Kelley Keehn, an educator and consumer advocate for the FPSC, said in a statement that many Canadians lack awareness of their spending habits.
“There are several ways to create awareness, such as paying only with cash for a month which accesses a different part of the brain that is associated with loss aversion,” she said.
According to the survey, almost half of all Canadians are within $200 of not being able to pay their monthly bills.
About 1,505 Canadians were surveyed between Jan 4 and Jan. 7. as part of the 2019 Household Debt survey. The study is considered accurate to within 2.5 percentage points, 19 times out of 20.
With files from CTV News Toronto's Pat Foran