Growing number of Islanders struggling with debt

An increasing number of Islanders are struggling to manage their debt, according to data from the federal Office of the Superintendent of Bankruptcy.

The latest numbers show a 15 per cent increase in filings from P.E.I. consumers in 2022. Bankruptcies held steady year-over-year, but the number of consumer proposals rose by about 60. 

Licensed insolvency trustee Walter MacKinnon says based on the high volume of calls his office in Charlottetown has been receiving, he thinks that might just be the tip of the iceberg. He said since the fall, calls are up 40 to 50 per cent. 

"It certainly has gotten busy," he told Island Morning's Laura Chapin.

MacKinnon said one factor that might be feeding into the increase is that in the early days of the pandemic, people were getting more support from the federal and provincial governments, and creditors were deferring payments. 

"There was a bit of a debt holiday, if you like. That's over. And now the money's stopped," he said. 

"Creditors are starting to pursue collection, and the debts that people had by and large at the beginning of COVID are still around and maybe even higher because they've added some interest."

Rising interest rates and inflation have also fed into what MacKinnon calls "a perfect storm" for many people.

"What I've noticed is most people just have an unfortunate situation that happens to them, that pushes them off the tracks," he said. "And when you're off the tracks, it's hard to get back on."

MacKinnon said for many people struggling with debt, the first step they should take is to meet with a licensed insolvency trustee. The initial consultation is free, confidential and there's no judgment.  

"If people have debt that they're struggling with, what they really should do sooner than later is talk to a licensed insolvency trustee, because we're the only people that can offer solutions and give them really a life changing solution to the debts they have," he said.