In Manitoba, personal bankruptcy was up by 21 percent last year, according to Bankruptcy Canada.

John Silver, executive director of a non-profit debt counseling service in Winnipeg, said the misuse of credit is a major cause of bankruptcy.

"We live in a society where most people live on their credit cards," said Silver.

Edward Fread and his wife are both working professionals but are buried under student loan debt, repayment of which takes one-fourth of their monthly after-tax income of $4000.

'All we need is one major unexpected expense and that might crush us,'—Edward Fread, Archaeologist

Fread said he often has to use his credit card in order to buy groceries or gas for their car.

They are living hand to mouth after accumulating $90,000 in student loans and are just one unexpected bill away from financial disaster.

"All we need is one major unexpected expense and that might crush us," said Fread.

Fread has a Masters degree in archeology and his wife, who works part-time due to injury and child-care responsibilities, holds a masters degree in occupational therapy.

"My wife and I combined pay over $1000 every month in student loan payments," said Fread. "That works out to about 25 per cent of our net income on a monthly basis."

Only 25 per cent of Canadians have any savings, which means the vast majority are living paycheque to paycheque, said Silver.

Total student loan debt in Canada is $13 billion and average student debt at graduation in Manitoba is $19,000, said Silver. This has an impact on a large number of people and these are big debts, added Silver.

Solutions

According to Silver, there are numerous repayment assistance programs that offer debt consolidation and interest reduction for people struggling to pay down their student loans.

In order to keep the option of renegotiating debt load open, it is also important to avoid the slippery slope of missing payments, said Silver.