Rising Household Debt
Residential mortgage and consumer credit together make up household debt, mortgages comprising the major. As per the conventional wisdom, mortgage borrowing is more secure as compared to consumer credit, as the former is secured against appreciable residential assets. However, the introduction of HELOC (home-equity lines of credit) lowers the credit risk against consumer credit. Although HELOC and equity loans are secured against housing equity, this type of borrowing may encourage buying consumer goods that depreciate in value, making the equity position of households more vulnerable.
CGA-Canada has been instrumental in monitoring the spending habits and the level of indebtedness of Canadians. According to one of its reports, debts in a typical household have been on a continuous rise. “…Between 1999 and 2005, the median amount of household debt grew by 37.8% surpassing the growth of the average amount of household debt which went up by 31%. As such, rising household indebtedness was caused by increasing debt load of a typical Canadian family rather than by more affluent households…” The households with a lower income reported an increase in their debt loads.
Debt Relief Programs
The main cause of the rising level of debt is spending on non-essential household goods and personal services. If you are struggling with debt, you can opt for debt relief from DebtManagers, a professional debt management and credit counselling organization. The organization also offers debt management tools like the debt calculator to calculate your payments.
Over the past decade, DebtManagers has been helping Canadians with debt consolidation and debt management. The trained debt consultants of DebtManagers can help you relieve your worries and make a fresh new start to living a peaceful and happy life.