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How Much Debt Is "Normal"?

Having a certain amount of debt is normal. In fact, most Canadians are in debt to some extent, through credit cards, mortgages, student loans or car payments. But when is your debt too much? You can evaluate your individual debt level by looking at Canadians of a similar age. Here are some recent debt stats, broken down by age group.

Average Individual Debt by Age

Statistics Canada regularly compiles debt data measuring these debt types:

When analyzing debt data, it’s important to use median numbers because the data can get skewed by the most and least wealthy groups. For example, a wealthy individual with a $5 million mortgage will have much more debt than an average homeowner.

How Do You Compare?

Here’s a breakdown of the 2022 median data for per-person debt by age group.

  • 18-25: $8,129

  • 26-35: $16,832

  • 36-45: $25,084

  • 46-55: $31,442

  • 56-65: $26,165

  • 65+: $14,386

All groups show a year-by-year debt increase. Inflation and higher interest rates have led to higher prices for everyday products and increased monthly loan payments. It means more people rely on credit cards to get by, which only adds to debt overload.

When Is Debt Too Much?

Calculating your debt-to-income ratio, which is your monthly debt obligations against your net income after taxes, is a good way to determine if you have too much debt. A safe debt-to-income ratio is 35 percent or less, while anything higher than 43 percent means you should consider ways to reduce your debt. Learn more about how to calculate your debt ratio.

Debt Solutions Are Available

If you have a high debt load or your debt-to-income ratio is above the recommended threshold, seek the help of a licensed insolvency trustee (LIT) from D. & A. MacLeod who can assess your situation and recommend ways to reduce your debt. Here are the two most common debt help solutions:

  • A consumer proposal is an agreement between you and your creditors whereby you pay a portion of what you owe. A consumer proposal protects your assets.

  • If you file for personal bankruptcy, certain assets are considered non-exempt in a bankruptcy proceeding, while others are fully exempt. Speak to a licensed insolvency trustee to learn more.

A licensed insolvency trustee can help you determine the process best suited to your situation.

Get Debt Help in Ottawa and Across Ontario

At D. & A. MacLeod Company Ltd., we help Canadians manage their debt load and get them on track to financial freedom. Our licensed insolvency trustees provide debt assistance services and can help you with tax debt or student debt concerns.

We offer in-person appointments at our Ontario locations and virtual meetings for clients across Canada. Contact us today to book a free, confidential consultation.

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