Bankruptcy fears, debt relief after COVID-19 shock, poll finds
CALGARY – Canadian consumers are more optimistic about their personal debt than they have been in three years, despite the recession caused by the COVID-19 pandemic, according to a survey.
An online survey of over 2,000 people for bankruptcy firm MNP Ltd. revealed that his net personal debt rating hit 31 in May, the highest in three years. The personal debt rating measures the difference between the number of survey respondents who rate their personal debt situation as “excellent” and those who rate it as “terrible”.
According to MNP, a greater proportion of people are confident they are in a good position to deal with debt, with 61% of respondents saying they expect to be able to pay their living expenses for a year without adding to their debt load. MNP says it saw 51% fewer consumers file for insolvency in May, compared to a year ago.
“The fact that many Canadians are more optimistic or even optimistic about their personal debt situation is likely a result of pandemic relief measures,” said Grant Bazian, chair of MNP’s insolvency practice. , in a press release. “Also, many have found it easier to spend less over the past few months as they were required to stay home.”
The results also indicated that respondents were on average $148 more at the end of the month after paying their bills, compared to early March.
Women, on average, had less money at the end of the month than men, according to the survey. Residents of Alberta were more likely to report a large surplus at the end of the month than those of Saskatchewan or Manitoba.
“COVID-19 has dramatically altered consumer spending since restaurants, theaters, malls and other bastions of discretionary spending were closed,” Bazian said.
“Even with marginal increases in groceries, utilities, and online shopping, many households reported significant savings that, in some cases, made them better able to meet debt repayments previously unbearable.”
The survey indicated that although attitudes towards personal debt are at their highest level in three years, 44% of respondents still regret the amount of their debt and only 33% expect their debt situation improves over the next year.
“At best, we’ll likely see these numbers quickly return to baseline as federal grants and stimulus dollars dry up, creditors begin to claw back deferred payments, and consumers return to pre-spending levels. the pandemic,” Bazian said.
According to generally accepted survey industry standards, online surveys cannot be assigned a margin of error because they do not randomly sample the population.
This report from The Canadian Press was first published on July 20, 2020.
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