Canadian Household Debt Exceeds That of the U.S.

September 19, 2012 (PRLEAP.COM) Business News
A recent analysis reveals that Canada's per capita household debt now exceeds that of the U.S. by a significant margin. According to the Bank of Canada, Canadians hold a total of $1.65 trillion in various household debts. That's over $47,000 for every man, woman and child in the country.

About 70 percent of this burden can be attributed to mortgage-related loans. The 30 percent that remains, which represents a collective liability of about $500 billion, is made up of outstanding credit card balances, personal lines of credit and home equity loans.

Many borrowers who have maxed out their home equity lines of credit or can't afford their monthly mortgage payments due to income loss are forced to look for less-desirable sources of credit. They often turn to unsecured personal loans or begin making everyday purchases with their credit cards in order to free up cash for payments on their secured debts.

According to the Bank of Canada, household debt has grown dramatically during the past decade. Much of this growth is tied to the country's booming housing market.

Collectively, homeowners have increased the aggregate value of Canadian home equity lines of credit by 400 percent since 2000. Today, nearly 10 percent of Canadians' total disposable income flows from these loans. In booming markets like Alberta and British Columbia, where home values have risen especially quickly, the use of home equity loans is even more prevalent.

The credit boom of the last decade has benefited banks, credit card companies, and investment houses to the detriment of many ordinary Canadians' finances. In fact, industries tied to lending have seen their revenues increase by 10 percent during the past half-decade. Residential construction has also boomed.

However, Canadian GDP growth has been stagnant outside of this relatively small slice of the economy. Despite the much-touted strength of western Canada's energy industry, oil and gas prices have proven far too volatile to confer lasting economic strength.

Unless the broader economy begins to improve, the household debts of the average Canadian may soon prove unsustainable. Even though most of the country's debt takes the form of secured mortgages and home loans, rising interest rates on these obligations are beginning to squeeze families across Canada.

The poor economy has robbed many hard-working folks of pay increases during the past few years. It's becoming difficult for average Canadian families to afford the payments on their increasingly expensive mortgages or home equity loans.

As a result, many formerly credit-averse consumers have been forced to rack up charges on their credit cards ( or take out unsecured personal loans to cover everyday expenses like food, clothing and school supplies.

These debts are forcing many hard-working folks into a tight corner. With no hope of paying off thousands of dollars' worth of high-interest credit card or personal loan debt, they're finding the formerly unthinkable option of declaring bankruptcy more attractive by the day.

Fortunately, there's a more attractive solution to mounting unsecured debts: a speedy, affordable process known as debt settlement.

Maple Leaf Debt Helpers offers a comprehensive debt settlement program ( that may help regular Canadians escape their debts in as little as 12 months. While every case is different, past debt settlement customers from Nova Scotia to Saskatchewan have seen the principal balances on their unsecured debts slashed by anywhere from 40 to 60 percent.

Whereas debt consolidation loans and credit counseling services merely afford their customers the opportunity to reduce their overall interest rates, Maple Leaf Debt Helpers negotiates directly with creditors to reduce their total debt loads. Depending on their particular debt situation, customers may save hundreds or thousands of dollars with this process. Canadians struggling to make the minimum payments on their credit cards are encouraged to call their toll-free hotline today or fill out their no-obligation online quote request form for more information.