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Several articles have appeared in the mainstream GTA press over the past week. All seem to cite the same interesting statistics, as released by TransUnion and Equifax Canada, Canada’s largest credit reporting firms. The articles all paint the same “I’ve got good news, and I have bad news” scenario.

Let’s look at the good news first: it seems (at least, according to the credit bureaus) that the average expensive credit card debt dropped a tiny bit. It was a small drop of just 0.4%, but luckily not an increase. Are consumers being more careful by only spending what they can afford to repay? One calendar quarter does not equal a trend. But this does give us some hope that Canadians will heed the advice of the debt experts and begin to use credit properly.

The second bit of good news for consumers is that bankruptcy filings and auto loan defaults are also lower.

And the bad news? (or, if you prefer, the “not such good news”)? According to Equifax, consumer debt (excluding mortgages) is still 3.1% higher than one year ago. And borrowing for auto purchases is up a huge 13.25% over the same time last year.

Add these indicators together and what they seems to be telling us is:

  1. Canadian consumers are still using credit – at a pace they cannot afford in many cases;
  2. Consumers are falling prey to the constant advertising and attractiveness of very low interest rates on auto loans. Maybe buying more car than they really need?

If debt keeps rising, and the Bank of Canada continues to warn us that an all-time high debt load clocking in at 50% more than is earned in a year is the #1 risk to Canadian consumers, what do we need to fix this growing debt problem?

The answer is actually a simple one. If you are carrying debt, and despite struggling to reduce the size of the debt load you seem to be making very little progress, you likely have “debt sickness”. That’s when it’s time to seek the help of a licensed debt relief professional (just be very careful when choosing an advisor). Only federally-licensed Licensed Insolvency Trustees can be fully trusted.

Licensed Insolvency Trustees are highly trained and ethically-bound. And don’t let the title “Insolvency Trustees”” scare you off. Trustees provide a full range of debt solutions that will help you. They usually do not charge for a confidential initial debt relief consultation, in which they assess your financial situation and all the debt relief options that are available to your case in particular.

My advice to you, based on the statistics above? Get “debt well”, and retire debt free.

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