More Canadians than ever are struggling to get by, crippled by mounting debt and unable to save for the future.

CBC News has interviewed a number of Greater Toronto Area families, many of whom are working full-time but say they are barely able to make ends meet.

Elizabeth McNaught, 57, says the trouble started when she and her husband of 25 years separated. The stay-at-home mom went back to school to become a personal support worker. She also got two credit cards that quickly spiralled out of control.

"We always paid for cash when we were together. Little emergencies came up and I got them. Next thing I knew I was using one to pay for the other," McNaught says.

It wasn't very long before she was more than $20,000 in the red.

"They were eating me alive with the interest rate on them … I was so upset by it. I wasn't sleeping. I was afraid to open the mail," says McNaught. "I couldn't get gas in my car and I need gas for my job."

McNaught adds she felt helpless and alone, but she's far from it.

The perfect storm

Canada's debt-to-income ratio reached 164.6 per cent at the end of June, up from 163 per cent in March. That was the biggest jump in four years and currently sits at its highest level on record. 

More than 70 per cent of Canadians carry debt, according to the latest numbers from Statistics Canada. The average figure per person is $21,028 in unsecured debt.

"Unsecured debt is not good debt," says Laurie Campbell, the chief executive officer of Credit Canada. "That means you have nothing to secure against it, higher interest and no way to pay it back."

'I didn't know what to do. I thought maybe I'd have to go bankrupt.' - Elizabeth McNaught says her debt

She's built a career helping people out of debt. But even she finds the latest numbers shocking.

"Interest rates are so low. Everyone is encouraged to borrow. People do not feel the need to go in a strict repayment plan to get out of debt," she says, calling it the perfect storm.

"Many are struggling, borrowing from lines of credit, credit cards and home equity to live a lifestyle that really, over time, is not sustainable," Campbell adds.

How did we get here?

Many families say they feel worked to the bone, mortgaged to the hilt, maxed out on credit and unable to get ahead.

It's a shift from just decades ago when Canada was once known as a nation of savers. As recently as the 1980s, Canadians, on average, saved 20 per cent of their income. That's dropped to 4 per cent.


Laurie Campbell, the chief executive officer of Credit Canada, says with interest rates being so low, everyone is encouraged to borrow. (Mark Blinch/Reuters)

Personal finance advisor Bruce Sellery calls it a "cultural shift."

"What we want trumps our ability to pay for it. In the 1930s, you could not get credit to buy a 52-inch flat screen TV. It was not available to you, so you did not buy the flat screen TV.

"Today, you can put it on your credit card. Today, you can withdraw equity from your home and you have all sorts of ways in which spending is enabled. And saving goes by the wayside," says Sellery.

Budget woes if rates go up

Katherine Scott, a mother of three, says there's just not enough cash flow in her family to save.

"Experts say that we should have six months of living expenses in cash and we don't. That's too much money. I don't know where we'd get it from," says Scott.

She and her husband bought their west-end Toronto home in 2009. Sky-high daycare costs made it impossible for Scott to retain her career, so they manage on one income.

Katherine Scott mother of three, debt series

Katherine Scott, a mother of three, worries about how she'd deal with any big unexpected expenses. Her family is making enough to get by, but there isn't much left over to save. (CBC News)

Their mortgage and bills are paid on time, but anything extra requires careful planning.

"We're frugal. We try our best. We save money when we can. We don't have a lavish lifestyle," says Scott, who buys most of the family's clothes on consignment.

"It's manageable as long as nothing else happens. If the interest rates go up, it'll affect our budget severely," she adds. "Were my husband to lose his job, or were there to be some kind of disaster or unexpected event, that would be very difficult. And that worries me."

As of September, Canadian households owed $1.88 trillion in outstanding debt. They added an additional $74.7 billion in mortgage debt in the last year alone. And the annual increase in the consumer debt load was 5 per cent — far outpacing inflation.

Slow climb out of debt

McNaught, meanwhile, says she hit rock bottom when her car broke down. She needed $300 for repairs, but both credit cards were maxed and so was her line of credit.

"I didn't know what to do. I thought maybe I'd have to go bankrupt," she says.

But she didn't. Instead, she called a credit counsellor.

"Having a plan and talking with someone with a bit of expertise, is often just the little thing they need to take control back," said Jeffrey Schwartz, the executive director of Consolidated Credit Counseling Services of Canada.

"For whatever reason Canadians like to keep this private. They don`t want to be seen as a failure with their money, so they keep it internal ... Going through this process, we see a tremendous amount of relief and gratitude."

McNaught cut up her credit cards and overhauled her spending. Last year, there were no presents under the Christmas tree for her grandchildren.

debit card scan

More than 70 per cent of Canadians carry debt, according to the latest numbers from Statistics Canada. The average per person is $21,028 in unsecured debt. (Canadian Press)

"I felt like I was cheating them," she says. "The older grandson knew. Nana had got herself in trouble and she had to get herself out of it."

Now she's close to being free of debt. And she already has plans for the money that once went towards her debt.

For the first time, she'll have savings. And real hope to retire one day.

"We'll see, each day at a time."