Equifax Canada says bankruptcies were up 15% in the last half of 2018 — and the credit monitoring company warns that rising delinquency rates are likely to become the norm this year.
The average non-mortgage debt for consumers rose 3% year-over-year to $23,500.
Mortgage debt remains stable, but interest on credit fluctuates year-to-year.
That's according to Andrea Orr, she spoke with AM800's Patty Handysides on The Afternoon News.
Orr is a Partner and Senior Vice-President of BDO Canada in Windsor and says there's an uptick in the number of people seeking assistance to deal with debt in Windsor-Essex.
She says interest rates have gone up — if people aren't making more money — something has to give.
"We lived in such a long period of time with low interest rates that money was pretty much free for quite a long time and we got used to that," she says. "Over the past year the interest rate has gone up and it makes our debt cost more."
Orr says credit card debt is where people tend to get into trouble.
"The rates now are quite high if you were to look it up you'd see that most are over 20%," she added.
She says licenced insolvency professionals should be a part of the decision on whether to come up with a plan to pay off debt or create a formal debt settlement proposal, which can have a similar effect as a bankruptcy on credit ratings.
"You cannot go based on what your neighbour says happened to them. We're all unique and everyone's situation is unique, we all need unique options," says Orr.
Orr adds bankruptcy applications are on par with national averages in Windsor-Essex.
— with files from AM800's Patty Handysides