By Ronald Quaroni

Half of Saskatchewan families on verge of bankruptcy

Jan 21, 2019 | 12:39 PM

Saskatchewan families are just barely staying financially afloat.

The latest numbers according to accountancy firm MNP’s Consumer Debt Index is that half of the province’s residents are only $200 away from bankruptcy after they pay their regular bills.

Pam Meger, an MNP Senior Vice President of Insolvency and Corporate Restructuring out of Regina, said one of the major issues is people have become too dependent on lines of credit.

“We’ve become very comfortable with borrowing. So what we’re seeing now is when that interest rate goes up it really affects monthly cash flow that people were using to bring down the debt,” Meger said. She added it may not get better.

“As the Bank of Canada (rates) go up we’ll see a lot of these numbers increase,” she said.

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Meger said specifically in the prairies, credit card debt is an issue.

“You know it’s really just those unsecured credit cards. We’re really seeing those limits get increased and they slowly increase them and you slowly creep up in them. When you get in those higher limits, there’s no way you’re even touching the principal payment,” she said.

More than half of people who took part in the Debt Index report stated that if the Bank of Canada raised their rates they would find themselves in financial trouble.

The same report added 36 per cent of residents don’t make enough money to cover their bills.

Allyce Bor, a parent aide with the Native Coordinating Council in Prince Albert said P.A families are facing challenges.

“We find as time goes on that expenses are going up. Rent, power, gas, phone bills, even groceries are going up,” Bor said. She added the money going out is increasing but money coming in is not changing.

“If anything it’s going down and it’s getting very hard to stretch that dollar even further,” Bor said, adding its important for families to be able to cover basic expenses. 

Pamela Meger with MNP said the most important thing is to stay on top of your debt and to seek advice.

“People sometimes leave it to the last minute and that’s when you get forced into a corner,” Meger said. She stated in the report that a trained professional is a good place to start.

“Those who are severely in debt can regain financial stability. They just have to get help from a licensed professional who can determine the best options for them,” she said.

ron.quaroni@jpbg.ca

Twitter: @RonaldQuaroni