CBC MARKETPLACE: YOUR FINANCES » DEBT
Debt Nation: Are we in over our heads?
Broadcast: January 15 and 22, 2006

As never before, Canada is a nation in debt. In fact, we’ve reached the point where the average Canadian family owes more than it earns.

In 1984, Canadians owed about $187 billion in personal debt. Today we owe more than $801 billion.

Personal bankruptcies are near record highs. In 2003, for the first time ever, the average Canadian household owed more than its annual take-home pay.

We carry 74 million credit cards – three for every Canadian over the age of 18. Credit counselling agencies say they're busier than ever. Students are often graduating with accumulated debt of $25,000 or more. Consumer debt levels are rising much faster than incomes and have been for years. Savings rates are at record lows.

So that's the bad news. Or is it? Are we facing a debt crisis, or can we handle it?

Marketplace met with three families living close to the edge. Like so many Canadians, they are living on credit and paying massive amounts of interest. Is there any way out in a world where money is practically free, and credit is there for the asking?

• Wayn and Teresa are in a "credit crisis," largely because they just can’t say no. They're desperately trying to gain control of their mounting debt, but say they're having trouble putting away their plastic.
  
  
• Joanne and Travis are in financial trouble, partially because Joanne is a self-confessed shopaholic. Not being able to control her impulses has put the couple in a dire predicament. They don't have any savings - if something disastrous were to happen, they'd be in financial free-fall.
  
  
• Hannelore is house poor. She feels overwhelmed by her mortgage and, at 56, worries she'll never be able to retire. She's anxious she's destined to become a burden on her children unless things change.