Credit counsellors offer advice to weather economic storm
(TORONTO, ON) – The numbers don’t lie: low oil prices are dramatically affecting the pocketbooks of Albertans. Credit bureau TransUnion reported this week that Albertan debt delinquencies are now above the national average, and non-mortgage debt levels are 30 per cent higher than the national average.
The delinquency rate, which tracks consumers who are more than 90 days behind on a payment, has historically been low in Alberta compared to the national average. Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, says the recent increase is a key indicator of financial trouble.
“It’s the canary in the coal mine,” says Schwartz. “Albertans carry a huge amount of debt, and that’s a bad thing, but at least they were good at servicing their debt. Now, it looks like they are falling behind and that is going to create a very bad domino effect for lots of Albertan families.”
Recent headlines indicate that the dominoes do seem to be falling in Alberta debt:
- Albertans owe an average of $27,599 in non-mortgage debt, compared to the national average of $21,247 (Transunion).
- The debt delinquency rate in Alberta is 2.63 per cent, compared to the national average of 2.6 per cent (Transunion).
- Half of Albertans are living paycheque-to-paycheque (Canadian Payroll Association).
- Alberta saw a 9.1 per cent increase in those receiving EI benefits from August to September, the largest jump in the country (Statistics Canada).
Schwartz encourages employed Albertans to get proactive and take a two-pronged approach to protect themselves against economic uncertainty.
“If you’re worried about job security, you really need to build an emergency savings account that will sustain you for three to six months, and you also want to clear out any high-interest credit card debt that you might have,” says Schwartz. “Prioritize your spending because every dollar counts.”
For those who are dealing with a layoff or reduction in income, Schwartz and the team at Consolidated Credit offer the following tips to stop the dominoes from tumbling:
- Apply for EI right away. Employment Insurance is there for a reason and it will help cover some bills while you transition to your next job. There is a two-week waiting period before you receive benefits, so it is best to get the ball rolling immediately.
- Drill into your budget. It is more important than ever to make and follow a budget. You have less coming in and you must prioritize and scrutinize your spending. Cut out the wants and focus entirely on the needs.
- Contact your creditors. If you’re worried that you might become a debt-delinquent, call your creditors right away and explain your situation. They will be more likely to negotiate your situation if you’re upfront with them. They’ll be less forgiving if you let some bills slip.
- Downsize and minimize. Take a look at your assets and see if there’s anything you could live without. Maybe you bought too many “toys” when times were good, and now might be the time to sell that ATV or motorcycle to free up some cash.
- Seek help. If your debts are too much to handle on your own, don’t be afraid of reaching out to a non-profit credit counsellor. Trained counsellors will analyze your debt and offer suggestions on how you can get back on your feet.
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Jacob MacDonald, Manager of Community and Public Relations, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041, C: 647-390-5253, F: 416-915-5200, E: [email protected]