Sean Reaume is all too familiar with the stress that comes with debt.
The 32-year-old Cambridge, Ont., resident has dealt with debt for several years, and it’s taken a significant toll on his mental health and well-being. Though he’s been working with a therapist to ease his depression, the personal and emotional burden of owing money has caused him to experience intense anxiety and insomnia.
“It’s horrible,” Reaume said. “I struggle every single day.”
The share of Canadians with debt is significant; according to a 2023 poll from the market research firm Ipsos, 46 per cent of Canadians “are carrying at least some form of non-mortgage-related debt,” with nearly half of them admitting that paying off those debts causes them stress.
The burden of debt can have a considerable impact on mental health and well-being, according to a new study by insolvency trustee firm Spergel shared exclusively with the Star.
The survey, designed to assess the mental health impacts of debt, explore reasons for incurring debt and to understand how people cope with debt-related stress, found that more than half of respondents had difficulty sleeping, while 44 per cent said they started over- or undereating as a result of debt-induced stress. Almost a third reported “socially isolating themselves from friends and family.”
The survey also found that people in debt can turn to a number of unhealthy coping behaviours, including overspending as an escape mechanism, substance use and gambling.
The report’s findings highlight the extent to which debt can be a root cause of mental-health issues, said Rob Kilner, a licensed insolvency trustee and partner at Spergel.
“Debt and mental health, they go hand in hand, whether you like it or not,” Kilner said. “So until you actually get at the core of the issue — which in our case, for what we do, is the debt — you’re going to probably struggle with that mental health, and that’s what you saw from the findings.”
The findings also illustrate how people often hide their financial issues from their social and familial circles out of fear of being judged or stigmatized, said Spergel partner and licensed insolvency trustee Gillian Goldblatt.
“The number of times people say to us, ‘Oh my god, thank you for not judging me,’ ” Goldblatt said. “And whether we have a solution or not, sometimes just talking about it with someone can be a big step forward.”
Spergel’s findings are based on survey responses from 234 of its past clients collected throughout May and June. While respondents varied in industry and trade, health care was the most highly represented industry.
The survey reported that credit card debt is overwhelmingly the most common type of debt across all demographics, while more than eight in 10 respondents reported having dealt with more than one type of debt at once. Other common types of debt found within the report’s sample are lines of credit, unpaid taxes, student loan debt and online quick loans.
Respondents younger than 45 primarily found themselves in debt due to a job loss, the report found, while those 45 and older reported “overspending or living beyond” their means as the most common reason for debt. Older generations may be more apt to take on debt instead of asking for help, said Kilner, even if their children or family members have the means to support or help them.
“You’re dealing with the most prideful generation,” Kilner said. “Even when they come to see us, I hear it all the time: ‘I just don’t want to ask my kids for help.’ ”
Hayley Hamilton, a senior scientist at the Centre for Addiction and Mental Health and the lead author of a 2019 study that found that debt stress was significantly associated with psychological distress, said that the perception of debt and the associated stress can often be subjective.
“You and I may have the same level of debt, but we may differ in the extent to which we’re stressed about it,” Hamilton said.
At the end of the day, Reaume advises those thinking of taking on debt to heed the words of former U.S. first lady Nancy Reagan and “just say no.” It can pile up quickly, he said, and it isn’t worth it.
“There are more irresponsible people than there are responsible people, whether or not they think it,” Reaume said.
