As Christmas holiday bills arrive, nearly half of surveyed British Columbians are "teetering on the edge of financial insolvency," with 31 per cent saying they're already unable to pay their bills. 

These figures appear in the latest MNP Consumer Debt Index, which finds a "sharp increase" of nine per cent to 46 per cent among British Columbians, who are less than $200 from not being able to pay their bills and debt payments each month. This increase wipes out the nine per cent improvement from the last report. 

Linda Paul, a licensed insolvency trustee with MNP, said many British Columbians are starting the New Year in a "fragile financial position" with holiday bills now coming due. 

Among the many measures of the growing financial stress on British Columbians is the fact that nearly 50 per cent of British Columbians told Ipsos, which conducted the survey for MNP, that they will not be able to cover all of their expenses in the next 12 months without going further into debt, up two points. 

Shrinking incomes also mean less room for unexpected expenses. While Paul points to the financial relief of lower interest rates, "less disposable income leaves households less prepared for unexpected expenses or economic impacts,鈥� Paul said.

鈥淔or those living on a tight budget, any disruption could quickly snowball into significant financial trouble.鈥�

About one-third of British Columbians (31 per cent, up four per cent) expressed lacking confidence in their ability to cope with an unexpected auto repair or purchase or changes in their relationship status (32 per cent, up five per cent).

Looming behind these concrete figures are snowballing effects in the wrong direction.

Paul said the convergence of post-holiday bills, economic pressures and unexpected expenses can exacerbate financial challenges.  

鈥淒uring this time of year, many people feel overwhelmed as the holiday bills arrive and financial challenges become more apparent," Paul said. "However, seeking professional guidance is a good first step in turning things around and avoiding more serious repercussions like wage garnishments and collection calls. 

Paul added that talking with insolvency experts allows individuals to explore debt-relief solutions like budgeting, debt consolidation, debt management plans, consumer proposals and bankruptcy to determine the best course of action.

The report though also points to the improvements. While more British Columbians are now close to insolvency or already insolvent than in the past, consecutive interest rate cuts in 2024 are leading to some improvements. 

The number of British Columbians concerned about their ability to repay their debts, even with interest rates declining, dropped by six per cent to 42 per cent. Fewer British Columbians (34 per cent, down seven per cent) say they concerned that rising interest rates could move them towards bankruptcy. But three in five (59 per cent) still say they desperately need interest rates to go down.

"Many British Columbians have already begun making adjustments to their budgets and cutting costs to manage the high cost of living and their debt obligations, which is a positive step in addressing their financial challenges,鈥� Paul said. 鈥淗owever, these efforts may still fall short of delivering the relief they need. It鈥檚 crucial to remember that support is available and reaching out for help can be the key to effectively navigating their financial issues.鈥�