Many Manitoba residents regret the amount of debt they've taken on: report

Amid interest rate increases and affordability concerns, many Manitoba and Saskatchewan residents are nervous and upset when it comes to their debt, according to a new report.

On Monday, MNP LTD released its latest Consumer Debt Index, which found that 57 per cent of Manitoba and Saskatchewan residents say they regret the amount of debt they’ve taken on. The consumer insolvency firm reports that this is a record high and that the number increased 19 points from the previous quarter.

The debt index also found that 50 per cent of these residents said they are concerned about their level of debt – a jump of nine points.

“We are seeing a notable spike in Manitoba and Saskatchewan residents’ attitudes towards their personal debt situation, which is a reflection of last year’s repeated interest rate increases and persistent inflation,” said Tanya Reynolds, a licenced insolvency trustee with MNP, in a news release.

“With inflation eating away at household budgets and rising borrowing costs squeezing Manitobans who are overleveraged and financially fragile, many are being hit by this double whammy.”

The survey found that compared to other provinces, Manitoban and Saskatchewan residents are the mostlikely to say they are feeling the impact of interest rate increases, which is a 15-point increase since last quarter.

Seventy-two per cent of Manitoba and Saskatchewan residents said they are concerned about their ability to pay off their debts as interest rates spike, with 61 per cent saying that if interest rates go up much more, they will find themselves in financial trouble. Twenty-six per cent also said their ability to absorb an interest rate increase of one percentage point has weakened.

Reynolds explained that households that are already spending most of their monthly income likely have very little wiggle room.

“That could make it difficult to accommodate any increases to their debt-carrying costs and expenses,” she said.

“When households like these are struggling to keep up their standard of living, they often end up taking on more debt to prop themselves up,” explained Reynolds.

The Consumer Debt Index also found that nearly half of Manitoba and Saskatchewan residents say that they are $200 or less away from not being able to meet their financial obligations, and that nearly 30 per cent say they don’t make enough to cover their bills. Only 51 per cent of respondents are confident they can cover their living/family expenses in the next year without going further into debt.

According to MNP, some ways to deal with debt are to create a deal with creditors through an informal debt settlement, consolidate all debts into a monthly payment, make a debt repayment plan, or declare bankruptcy.

“Especially with the arrival of the holiday bills this month, I would urge Manitobans to be on the lookout for any financial red flags that may indicate a need for professional debt help,” Reynolds said.

Ipsos conducts the MNP Consumer Debt Index quarterly to determine Canadians’ attitudes about their debt and their ability to meet their payment obligations. The data for the latest index was collected from Dec. 1 to 6, with Ipsos surveying 2,000 Canadians. The poll is accurate within plus-minus 2.5 percentage points, 19 times out of 20.