March 15, 2012

“Blow, blow, thou winter wind
Thou art not so unkind
As man's ingratitude”

William Shakespeare

We hear all kinds of stuff about money, credit and debt these days. The message consistently points the finger at consumers for either not using enough credit or using too much. The economists complain that when consumer spending is down it hurts the economy. At the same time they complain about the frightening levels of household debt.

I attended a seminar recently of insolvency practitioners in British Columbia and saw much of the same there only the highly researched papers were written in a language (vernacular) unintelligible to the general public. These papers on consumer debt were published on the finest paper and the most expensive hard bound books money can buy. In a nutshell, the message prevailed that consumers have an insatiable thirst for credit and this needs to be curtailed. Financial literacy programs have thus been designed by the Federal government and a certain group of credit counsellors to zero in on the new immigrant population and the poor. One of my questions: “How much of the $483 billion outstanding in consumer credit do these groups owe?” Or, even more poignant, “Who actually owes this debt – the middle class, seniors, young people, families raising children???”

What drives me crazy is what is missing from these studies. For example, there is no mention of over-lending as a cause of bankruptcy. Isn’t this a bit of a stretch? No mention is made of inflation or taxation, the impoverishment of the modern family unit, the cost of day care or the real costs that people face.

There is a different story under the tip of the financial iceberg. Middle and lower income groups are scrambling to meet their basic expenses and much of the time use the credit resources to make ends meet, not to fund lavish lifestyles.

One case in point refers to the seniors on the Province of British Columbia’s Pension plan. A couple of months ago they were advised that effective April 1st almost all subsidies would be discontinued. This doesn’t sound like a government cut back, but it really is.

A friend of mine has three people including him listed for coverage. All of a sudden his medical expense jumps from $56.00 to $128.00. This is a 228% increase. How does a pensioner respond to this?

The extended medical subsidy has been removed effective April 1st, 2012 which means a $96.00 increase in premiums.

In an instant, after contributing to the Pension plan for 28 years, many seniors are dying a slow financial death by a thousand cuts. Many drugs have been delisted for coverage and, in my friend’s case, he must pay full price for medication, such as $128.00 for a 3 month supply of prescribed depression medication until the annual Pharmacare levy is paid.

Research has found that seniors will stop taking their prescribed medication when there are financial conflicts. If they don’t have enough money for everything, they will forego food and medicines. In some cases they will pay aggressive debt collectors first and suffer.

Yes, under the tip of the financial iceberg is a different reality from the one we find published in glossy hard cover research papers or the ones presented by the financial experts who are featured by the media in their newscasts.

Remember, if you are experiencing financial difficulties do not wait. Call Solutions Credit Counselling at 1(877)588-9491 or fill out our Debt Consolidation Questionnaire and get your Free Credit Counselling Advice today.

For more information visit Debt Canada - your Canadian credit education centre.

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