Canada’s Rising Debt Crisis: Why Borrowers Are Struggling

The Growing Financial Struggles in Canada 

Canada’s consumer debt crisis has reached a tipping point. By the end of 2024, total consumer debt surged to $2.56 trillion, a 4.6% increase from the previous year. Mortgage delinquencies are rising, credit card balances are growing, and more Canadians are relying on high-interest loans just to cover everyday expenses. 

At Pyxis Solutions, we work with individuals who are struggling with debts we’ve acquired. We understand that financial hardship isn’t just about numbers—it’s about real people facing real stress. If we’ve contacted you, we’re here to help you find a manageable way forward, not to add more pressure. 

This article breaks down why debt is rising, who is most affected, and the practical steps you can take to regain control. 

1. Canada’s Consumer Debt Reaches Record Levels 

Household Debt is at an All-Time High 

Canada’s household debt-to-income ratio has reached 185%, meaning that for every $1 earned, Canadians owe $1.85 in debt. This puts thousands of families at risk, as even small financial setbacks can quickly spiral into deeper financial hardship. 

Key debt statistics: 

• Non-mortgage debt per consumer: $21,931, surpassing pre-pandemic levels. 

• Credit card debt: Increased by 7.8% in Q4 2024, reaching a national total of $130 billion. 

• Mortgage delinquencies in Ontario: Up 90.2% year-over-year, with over 11,000 homeowners missing payments in late 2024. 

If you’re feeling overwhelmed by debt, you’re not alone. Many Canadians are finding it difficult to keep up with rising costs, but there are solutions. 

2. Why More Canadians Are Falling Into Debt 

High-Interest Debt is Becoming Unmanageable 

Credit cards and payday loans offer a quick fix for short-term financial struggles, but they come at a high cost. With interest rates averaging 19-25%, even small balances can grow rapidly. 

For example: 

• A $3,000 credit card balance at 22% interest could take over 10 years to pay off if only minimum payments are made. 

• Payday loans charge an equivalent annual interest rate (APR) of 400% or more, making them one of the most dangerous financial products. 

What you can do: Prioritize paying off high-interest debts first or look into debt repayment options that reduce your interest burden. 

The Cost of Living is Outpacing Wage Growth 

The price of necessities has skyrocketed, forcing many Canadians to rely on credit just to afford daily expenses. 

Rising costs in 2024: 

• Groceries: Increased 7.1% year-over-year. 

• Rent: A one-bedroom apartment in major cities now costs $2,200/month on average. 

• Utilities & Gas: Higher energy costs are straining household budgets. 

When income doesn’t keep up with inflation, people turn to credit cards, loans, or home equity to fill the gap. 

Mortgage Holders Are Struggling to Keep Up 

Over one million mortgages are up for renewal in 2025, with many homeowners facing higher monthly payments due to past rate hikes. 

• Some mortgage holders are seeing payments increase by $500-$1,000 per month. 

• Ontario and British Columbia have seen delinquency rates climb sharply as homeowners struggle with affordability. 

If your mortgage renewal is coming up, start preparing now by reviewing your budget and exploring refinancing options. 

3. The Mental and Emotional Toll of Debt 

Debt isn’t just a financial issue—it affects your mental well-being, relationships, and overall health. 

• 68% of Canadians say financial stress has affected their mental health. 

• Debt-related anxiety can lead to poor sleep, relationship strain, and even workplace burnout. 

Ignoring debt makes the problem worse. The sooner you take action, the more options you have to reduce stress and take back control. 

4. Practical Steps to Regain Financial Control 

If you’re struggling with debt, here’s how you can start making progress today: 

Build a Realistic Budget 

• Essentials (rent, groceries, utilities): 60-70% of income. 

• Debt repayment & savings: 20-30%. 

• Discretionary spending: 10% or less while focusing on debt reduction. 

• Use free budgeting tools like Mint or YNAB to track your spending. 

Prioritize Debt Repayment 

• Snowball Method: Pay off the smallest debts first to build momentum. 

• Avalanche Method: Pay off the highest-interest debts first to save money over time. 

• Debt Consolidation: If you’re juggling multiple payments, look into options to combine debts into one manageable payment. 

Build an Emergency Fund 

• Start small—even $500-$1,000 can prevent reliance on credit in emergencies. 

• Use automatic transfers to make saving easier. 

Seek Guidance and Support 

• If you feel overwhelmed, you don’t have to do this alone. This is where Pyxis Solutions can help. 

5. How Pyxis Solutions Helps Canadians Struggling With Debt 

At Pyxis Solutions, we’re not a collection agency in the traditional sense. If we’ve contacted you, it means we’ve acquired your debt from a previous creditor. Our goal is to help you find a repayment solution that works for your situation. 

How We Support You 

Flexible Repayment Plans – We create custom plans that fit your budget. 
Lower Repayment Options – In some cases, we can reduce your total owed amount. 
Financial Guidance – We provide resources to help you rebuild and avoid future debt struggles. 
Compassionate, Judgment-Free Support – We’re here to help you move forward, not to add stress. 

6. Avoiding Debt Traps Moving Forward 

Use Credit Wisely 

• Only use credit when you can pay off the balance in full each month. 

• Avoid high-interest loans and look for lower-cost borrowing options. 

Plan for the Future 

• Automate savings and bill payments to stay ahead of financial obligations. 

• Set a goal to increase your emergency fund over time. 

Stay Informed 

• Continue learning about personal finance and debt management. 

• If debt becomes overwhelming, seek professional guidance sooner rather than later. 

Take Control of Your Financial Future 

Canada’s rising debt crisis is making financial stability harder to achieve, but you don’t have to navigate it alone. By understanding your debt, using smart repayment strategies, and seeking support when needed, you can regain control. 

If Pyxis Solutions has contacted you, let’s work together on a repayment plan that makes sense for you. 

📞 Call us today: 1-888-354-8900 
🌐 Visit us online: PyxisGroup.org 

Debt doesn’t have to define your future—let’s take the first step toward financial freedom together.