Did you know that Quebec households have some of the highest debt in all of North America? And that one Quebecer in three claims they are worried about their financial situation? Might be hard to believe, but believe it.
High levels of debt in Quebec households are linked to two primary reasons:
- Low interest rates
- Increasing real estate prices
Indebtedness among Quebecers: Some Scary Statistics
Quebec households are finding themselves increasingly in debt, and one need only consider the following statistics:
- The debt ratio among Quebec households is 170%: The United States was faced with a similar ratio leading up to the 2008 financial crisis
- Debts have increased from $40,000 in 2000 to $80,000 in 2015
- In 6 years, the average debt of Quebecers without a mortgage jumped from $10,443 to $18 000, an increase of 73%
- 100,000 Quebec households are currently facing precarious financial situations
- 46,000 individuals and companies have declared bankruptcy or have submitted a payment agreement
Experts are predicting a continued increase in the indebtedness rate among Quebecers. At the same time, Quebec households are becoming increasingly vulnerable to fluctuations in their salaries and in interest rates, which can also impact financial institutions.
Indebtedness Has No Age Limit
Debt problems can affect a young person under 35 as much as they can a senior who’s 65 years or older.
Regardless, young people under the age of 35 are the ones experiencing the highest growth in debt. This is primarily caused by their tendency to purchase assets such as their first home, which themselves have considerably increased in price (as well as in value).
Young individuals have also enjoyed low interest rates, which have encouraged their investing in property. Yet these low interest rates have also benefitted those over the age of 65 who have the means to purchase a second residence, for instance.
Should We Worry?
100,000 Quebec households are considered to be majorly in debt, but are they concerned about their situation? The following are some telling statistics:
- 39% express difficulty in paying end-of-the-month bills
- 35% think their debt exceeds their assets
- 31% feel that their financial situation has not improved over the years
- 46% are not hopeful about retirement
In light of the above, it’s encouraged to regularly calculate one’s indebtedness rate so as to have the full picture of his/her financial situation. Beware: Household indebtedness levels are considered an economical risk factor in Canada.
If you’re facing major debt, there are solutions, such as debt consolidation, a consumer proposal, and personal bankruptcy.
Don’t hesitate to reach out to an insolvency and recovery trustee, who can guide you on your financial situation.