State of personal indebtedness in Canada. You may focus on student Research Paper

State of personal indebtedness in Canada. You may focus on student debt or the order as a whole - Research Paper ExampleRecent figures suggest that the current level of personal debt in Canada is on the highest level for the noncurrent 8 years. The average non-mortgage personal loan of a Canadian is approximately $26,221 in the second quarter of 2012 suggesting that the general debt levels are on the skip. (Johnson, 2012) There give notice be various reasons for this including the general trends and preferences of the consumers as well as the ability of Canadian banks to remain profitable and continue to supply consumer debt despite the fact that overall global scenario may not be encouraging. These trends are considered as troublesome as persistently high levels of personal debts brush off actually create dependable consequences for the economy as a whole. This paper get out discuss about the personal debt in Canadian society as a whole and will discuss the concerns as well as solutions for it. Personal Debt in Canada The recent trends of personal debt in Canadian society as a whole induce been alarmingly high. The current average debt level in the second quarter of 2012 stood at $26,221 higher(prenominal) by $192 from the previous quarter. This figure is in addition considered as the highest during the hold up eight years since Credit Bureau actually started to track the personal debt levels. (Johnson, 2012) Studies have shown that debt to income ratio is on the rise as well as the debt-to integrality assets is on the rise too. These trends indicate that more(prenominal) and more portion of consumers income is taken by the debt and higher debt payments can actually reduce the disposable income for the individuals. Average one-year growth rate of household debt in Canada grew by 7.4% in nominal terms and 5.3% in real terms during 2000-2011. Such consistent level of step-up in household debt has actually shake off personal debt at the level whic h may not be sustainable for consumers in the long run. It is also historic to note that this rise in the consumer debt is mostly in the non-mortgage debt class and is also secured against the household items. Such characteristics of the personal debt may therefore create significantly more economic consequences for the households. (Crawford & Faruqui, 2012) It has been suggested that such high level of personal debts can actually put Canadians at more vulnerability towards the economic shocks as any inauspicious change in employment dynamics can put lot of stress on the disposal income of the consumers. Sharp decline in home set as well as increase in interest rates as well as relatively higher level of unemployment can put individuals at more risk considering the current levels of debt in the country. (Chawla & Uppal, 2012) IMF has also shown its reservations over the higher levels of personal debt in Canadian economy and indicated that higher levels of personal debt can actual ly reduce the economic growth of the country. IMF has even cut its economic forecasts for Canada owing to higher personal as well as mortgage loans and suggested that higher debt levels at consumer level can actually create more risk for the economy as a whole. (BABAD, 2012) Some data indicates that this trend is on the rise across all ages and there are different factors which are actually at play causing the consistent rise in the personal debt levels. It has also been suggested that the persistent increase in the level of income as well as low interest rates have also contributed towards these trends. Some theoretical