September 5, 2017

Consumer proposals and bankruptcies can be a great way of dealing with excessive debt.

At one time credit cards were very hard to obtain and only wealthy people had access to such, self-administered, credit facilities.  Credit card users can increase their credit limits quite easily and determine within specified parameters how much they will pay on the credit card each month.

The profit margins on credit cards are very high with interest rates ranging up to as much as 30% or in some cases even more.  Credit card debt only represents between 5-6% of Canadian household debt, the rest is made up of mortgages, loans and lines of credit.

There are currently in excess of 80,000,000 credit cards in circulation in Canada which represents about 4 credit cards for every adult in the country.  Canadians owe about $75,000,000,000 (or $2,200 for every man woman and child in the country) on those cards.

Last year Canadians filing bankruptcies and proposals declared about $15,000,000,000 worth of debt and claimed to have assets valued at $10,000,000,000 which includes assets that are exempt from seizure such as clothing and personal effects as well as assets that are fully encumbered such as houses and cars.

Depending on which statistics you attend to Canadians owe about $1,800,000,000,000 in household debt that works out to about $53,000 for every man woman and child in the country.

Last year about half of 1% of Canadians filed an insolvency proceeding.