Advisors urged to watch for financial stress as households battle worsening debt burdens
Canada’s escalating debt burden is now inseparable from worsening mental health, adding urgency for financial advisors to identify clients who may be silently overwhelmed.
The second annual Debt Load & Impact to Psychological Well-Being Report from Spergel shows stress, anxiety, and despair are increasingly tied to household finances, following Statistics Canada’s disclosure that the national debt-to-income ratio climbed to 174.9% in Q2 2025, translating to approximately $1.75 in credit market debt for each dollar of disposable income.
Survey feedback from 618 former Spergel clients reveals that 90% endured moderate to severe stress tied directly to debt. Persistent worry was reported by 83% of participants, while 74% said sleeplessness was a frequent symptom. More than half grappled with depression linked to their financial situation, and 17% acknowledged they had experienced suicidal thoughts.
On a positive note, 87% of respondents said their mental health improved after filing for insolvency, although most warned that the emotional effects of debt do not simply disappear once the financial issues are addressed.
The report shows that many Canadians don’t seek timely professional guidance because they fear judgment or lack information on available options.
“Insolvency solutions, from debt relief to consumer proposals, can offer substantial long-term mental health benefits for debt related stress.”, Alan Spergel, president & founder, msi Spergel Inc.
The profile of those turning to insolvency does not point to a single risk group with married and single respondents were represented in near equal measure, while educational backgrounds varied widely from high school graduates to those with bachelor’s degrees. Individuals aged 55 to 64 comprised the largest share of those seeking help, closely followed by seniors 65 and older, and Canadians aged 45 to 54.
Meanwhile, national insolvency statistics reinforce the financial squeeze. Between April and June 2025, 35,114 Canadians filed for consumer insolvency, a 2.6% increase from the first quarter. Over the 12 months ending June 30, filings rose 4.9% year-over-year.
Respondents to Spergel’s survey described feeling ashamed, helpless, indicators that advisors may observe before clients articulate a financial problem. The report argues that early intervention could prevent serious mental health decline.
“This is a very real and serious problem that impacts so much on our society. Shame, fear of judgment, and lack of information are some key reasons why people delay seeking professional insolvency help. It doesn’t have to be this way, she added.”, Gillian Goldblatt, Partner, msi Spergel Inc.
