There is no day when some financial analysts, economists or public officials express their concern about the number of debts, carried by Canadian households. You want to get the answer to the question “How much is Canada in debt”? NorthnLoans guarantees: you would be shocked if you reveal the financial situation of your friends and neighbors.
Who are the borrowers?
The stereotype that only “deadbeats” have debts doesn’t work in reality. People, who get into serious debt troubles, are the most typical individuals who surround us. For example, a staff accountant may have a few credit lines, a huge mortgage, and two rented posh cars; a teacher can have two mortgages and six credit cards with high balances; a driver can have $80 000 unsecured credit lines and so on. These cases are not extreme, they are ordinary in practice of trustee firms. All these borrowings increase Canada’s national debt.
Illustration of Canada debts
If you are interested in the federal debt in total and which part of it is your share, you can take a look at Canada debt clock. It is made in a clear and understandable form. Currently, federal debt comprises $646 billion. Every day it becomes $57 million bigger and every hour at a rate of near $2 million.
Statistics show that immoderate debts get normalized. The household debt-to-income ratio currently comprises 169.4. It is 23% more than ten years ago. This number is average. The Bank of Canada informs that half of all big mortgages, that appeared in Toronto were borrowers, whose loan-to-income ratio exceeds 450%.
Why is Canada in debt
The main problem is that all the borrowers belong to the middle class: they are officially employed, they have a house and seem to be financially responsible. But this image is built on Canada’s debt. Often these people have a huge tax debt: one broker had avoided paying taxes and had to pay to the Canada Revenue Agency $383 000. Other people tried to launch a business but failed. Financial companies often give big sums to underemployed people, who are financially unable. One man migrated to Canada fifteen years ago and has not worked. Now he is retired and his debt stands $200 000.
So nowadays many people can’t afford a normal life. The desire to spend money is too big and getting credit is so easy. People get debts when the gap between their needs and desires is getting too narrow. When you start having more money out of nothing, you can’t stop this cycle. You start from $5 000, later you take $15 000. Nothing keeps you away from borrowing more. Afterward, debt reaches $50 000 or even $100 000. People with the middle income just can’t pay such a high-rate debt off.
How to cope with debts?
These debts will continue to restrain the economy of Canada until they are paid. So people need to get some knowledge about debt, its nature and how to cope with it. There are several companies that offer Federal Government programs and were founded to educate people and businesses who are in debt.
For example, if you have high-interest debt, the best solution is to consolidate it with online loans. It helps you satisfy all your debts with a fixed payment once a month. If you have to pay many credits separately, you can slip one of the payments and it will lead to more debts and decrease your credit score. After consolidation, all your payments turn into one single automatic payment once a month. It makes borrowing more simple. This payment is less stressful and time-consuming.