“Consumers can often be tricked into thinking their debt isn’t ‘too much’ by not realizing how easily problems spiral out of control,” said Blair Mantin, president of Sands & Associates and licensed insolvency trustee. or how can the challenges of ordinary life leave people facing unimaginable financial hardships and extreme stress.”
Four of the five most prominent causes of debt were beyond a person’s control, including the essential cost of living that a basic wage could not cover, which was noted by 18% of participants.
Other direct primary causes of debt identified were illness, injury, or health issues (10%); breakdown in marriage or relationships (8%); and work-related issues (8%). Less than a third (28%) of the total number of respondents believed that debt problems arose due to over-borrowing due to general financial mismanagement.
More than 56% of all consumers surveyed said that credit card debt was the most common type of debt when they began formal debt settlement. The use of loans as a “last resort” continues to grow, with high-cost loans such as payday loans and installment loans (9%) being among the most commonly reported types of consumer credit.
In terms of being in debt affecting their well-being, 77% reported that their mental health had deteriorated as a result, and 53% said their physical health suffered. Persistent concerns about debt were reported by more than 4 out of 5, and more than three out of four reported concerns. Worryingly, nearly 1 in 6 of the respondents said that the stress of debt drove them to commit suicide.