Debt is hurting mental health as living costs climb, Spergel survey finds

A new msi Spergel survey of 546 clients finds 90% say debt has affected their mental health, as 93% cite rising living costs as a driver of deeper debt. The findings suggest financial stress is showing up earlier and more intensely, even before missed payments or collection calls.

Why it matters: - Rising costs are pushing more Canadians deeper into debt and into stress that can affect daily life, sleep and decision-making. - The survey suggests many people wait too long to ask for help, which can make financial problems harder to solve. - The findings come as Canadian consumer insolvencies hit their highest quarterly level since 2009 in Q2 2026.

What happened: - msi Spergel released the third annual Emotional Toll of Debt study. - The survey polled 546 Spergel clients between May and June 2026. - 93% of respondents said increased cost of living was a reason they went deeper into debt. - 90% said being in debt affected their mental health. - 84% said overwhelming stress was the first sign their debt was becoming a problem.

The details: - 69% of respondents said they experienced moderate to extreme stress tied to debt or finances. - 46% described that stress as extreme. - 82% said worrying about debt had a longer-term impact on their mental health. - 90% reported constant worry about money or debt. - 41% delayed seeking professional help. - Among those who waited, 83% said they believed they could manage the situation on their own. - 78% said financial literacy programs would have helped them better manage debt-related stress. - Respondents also pointed to grocery and housing costs as leading pressures. - The study said people often tried multiple fixes before formal insolvency, including taking on more credit, refinancing, borrowing from family and friends, cutting essential spending, working more, using savings and selling belongings. - The survey asked what would have helped most. Financial literacy programs ranked first, followed by grocery affordability support, budgeting tools, improved income and one-on-one debt advice. - The study sent a 30-question online survey to 3,547 clients and received a 15% completion rate.

Between the lines: - The results suggest debt distress is not only a financial problem. It is becoming an early mental health issue for many households. - Licensed Insolvency Trustee Gillian Goldblatt said many Canadians are facing the combined pressure of inflation, higher borrowing costs, housing costs and household debt. - Goldblatt said people do not need to wait for missed payments or a collection call before speaking with a Licensed Insolvency Trustee. - The survey points to a prevention gap. Respondents said education and practical support could reduce both debt and stress before a crisis.

What's next: - Spergel says consumer proposals and bankruptcy can be used as legal, rehabilitative tools to help people regain stability. - The findings could fuel more demand for early-stage debt advice, budgeting help and financial literacy programs. - Pressure on household finances will likely remain a key issue as living costs stay elevated and insolvency filings remain high.

The bottom line: - For many Canadians, debt is now hitting mental health before it hits a missed payment. Early intervention may matter as much as the debt solution itself.