More consumers likely to seek help in 2009: debt counsellor
Last Updated: Monday, January 5, 2009 | 6:11 AM PT
CBC News
The Credit Counselling Society says 2009 will likely be a busy year for debt counsellors in British Columbia due to the global economic downturn.
Scott Hannah, the not-for-profit society's CEO, said they saw a 40 per cent increase in the number of consumers contacting them for assistance in the last quarter of 2008, and he predicts that trend will continue throughout 2009.
"What we're seeing…is a real concern by the public who are carrying a large amount of consumer debt in addition to household debt," Hannah said. "Many of these consumers recognize that with changing economic times, and a worsening in our economy for some, that they need to address these problems."
Because of the rise in house prices and the overall upswing in the economy over the past few years, Hannah said the vast majority of consumers were more focused on maintaining their lifestyle than reducing their debt.
"Consumers are concerned about these problems and recognize that they can't continue to rely upon lines of credit as their lifeline," he said. "They really need to look at how to reduce their debt and go back to old-fashioned savings as a means of helping them get through a rough period of economic activity."
Many consumers are finding it difficult to pay down their debt, Hannah said, because people trying to qualify for things like consolidation loans are discovering it's getting a lot harder to get loans.
"We're seeing that our financial institutions are being cautious about who they're lending money to and in particular those customers who may have a good record of payment but have a very high debt to gross income ratio," he said.
Hannah said with his years of experience in the business, the increase in people seeking help to get out of debt is not surprising.
"We could see this coming," he said. "This is a problem that's been brewing for a couple of years."
Hannah said the Credit Counselling Society hired additional debt counsellors in the summer in anticipation of the demand increase.
