# Who has the most debt?

May 10, 2018

The question “who has the most debt?” is certainly one that interests Licensed Insolvency Trustees. After all we like to know where our business is coming from and who to advertise to. So, just who has the most debt in Canada?

That is complicated question in terms of raw debt versus percentage of debt. When debt to income ratios are used it turns out that the top 20% of income earners only have debts that are about 128% of the gross annual income. For example, if a person were earning \$70,000 per year they would be in the top 20% and have debts of \$89,600.

By contrast, a person earning the Canadian Median wage of \$27,600 would owe 333% of their gross annual income in debt. That would mean that they would owe \$91,908 to their creditors. The thing is that this is not truly reflective of where the pressure points are because as move lower down the food chain incomes drop dramatically to where nearly eight times more people earn less than \$5,000 a year than earn more than \$250,000 per year.

It would appear, if these statistics were meaningful, that one person earning \$250,000 would be in debt to the tune of \$320,000, that amount would be equal to the amount of debt owed by more than nineteen people earning \$5,000 per year.

Getting lost in the numbers yet? You should be, statistics say basically whatever you want them to say. The other part of this equation is that low income earners, statistically, have very little access to debt (credit) and high earners need to give their heads a, metaphoric, shake if they are carrying such staggering levels of debt.

We’ll restate the question “who has the most debt?” considering the information above we can clearly see that debt is focused in the upper middle income earning bracket. Since the lowest and highest income earners have the least debt and those around the median range have less access to debt the ratios of debt to income are surely much higher and more concentrated in the so called middle classes.

If you are earning more than \$40,000 and less than \$150,000 you are likely to have debts that far exceed 200% of your annual gross income.

After you have given your situation some consideration and determined that your debt load is more than you can handle give our office a call at 519-646-2222 to arrange a free consultation for a review of your options.