More Albertans are unable to pay their debts, numbers up from June: MNP
EDMONTON -- New figures from the MNP Consumer Debt Index show that 25 per cent of Albertans are unable to pay their debts.
The rate of insolvency is up five per cent from June, a “significant” increase according to Sandra Landry, a licensed insolvency trustee.
The increase is equal to about 221,000 Albertans.
Landry said that the increase could be related to the end of the Canada Emergency Response Benefit (CERB) program as the federal government rolls out a new program.
“People are starting to get nervous, they don’t have those extra benefits and there are some individuals who received CERB, and that total was more than they were making before, so it puts them in a worse position now that they’ve lost it again,” said Landry.
"It's possible things will get worse in the future. A lot of it is going to have to do with who is going to be eligible for those new EI benefits. So CERB has ended, there are programs in place, but it’s not clear if everybody’s going to be eligible for those so there could be some folks who fall between those cracks."
The MNP index is partially based on how people are feeling about their debt. As the pandemic wears on, Landry said people may grow more unconfident in their financial situation.
“They can’t get back to work, they don’t know if their employer is going to reopen or they don’t know if they’re ever going to make the same wages… Of course there are some folks whose employers haven’t made it through.”
Nationally, certain demographics are being affected more than others when it comes to debt management, according to Landry: households with incomes les than $40,000, millennials, women and renters.
Landry said people experiencing insolvency should speak to a professional as early as possible to increase their available options.
“That could include simply budgeting your way out of insolvency, that could include refinancing or liquidating your assets, they’re also going to tell you about credit counselling and bankruptcies.”
The national increase in people unable to pay debts was 4 per cent, totaling 26 per cent of Canadians.