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The Female Factor: a female experience with credit and debt

Walk through some of the barriers faced by females when navigating the financial industry, a system biased against females, and learn how credit rebuilding after an event such as bankruptcy or proposal can vary by gender.

Today we are featuring the third instalment of the trio of blog posts written by Crystal Buhler, Licensed Insolvency Trustee with C. Buhler & Associates Ltd. ( The views expressed below are hers, with an understanding that there are other biases that exist that impact one’s financial life.

As a Licensed Insolvency Trustee (“LIT”), I specialize in helping those who require professional assistance to deal with their debt problem. We used to be called Bankruptcy Trustees, but we do so much more than just bankruptcies. An LIT generally files a Consumer Proposal or bankruptcy for those people or companies who need relief from debt.

When we meet with an individual in financial difficulty, we hear many of the stories behind their situations, and over time, the stories start to take on a ‘theme’, or recurring pattern. One such pattern I’ve noticed is the ‘female factor’ – that is, women who face bias and barriers in the financial industry simply because of their gender, or gender identity.

There are many available options to help women facing debt. Consolidation loans, budgeting adjustments, financial counselling, Consumer Proposals, or even bankruptcy if need be, are accessible to all Canadians, with costs and level of success depending on a person's assets, income and credit score. While women are purported to have equal access to these options, I look to insolvency statistics to support the observation that an increasing number of women are filing an Insolvency (a term used to describe those who file either a proposal or a bankruptcy through an LIT). Even as an LIT, I will tell you we consider an Insolvency an option of last resort, and much of our consultation process is spent assessing the debtors’ ability to qualify for another debt relief option such as a consolidation loan, before considering options such as bankruptcies or proposals.

Over time, the tracking of insolvency files in Canada has shown that:

  • Although strides have been made to lessen the income-gap and the wealth-gap, there is still a significant difference in the amount women earn over the life of their career, and the amount they will have to invest. Add to this calculation the loss of income over periods of time women take from the workforce to care for their families, and the time value of money, and women lag behind in ensuring a retirement income that is equivalent to that of men.

  • When contemplating an insolvency, women generally carry approximately 20% less debt than men. While on the surface this may appear to support an observation that women are more risk-averse than men and seek options earlier, another key factor should be considered. As discussed above, women have less after-tax income with which to support their household. So even though their debt is lower, the required payments on debt take up a larger percentage of their after-tax income.

  • When other risk factors are considered – sole-parenting, recently separated or divorced, being widowed – female debtors are much more likely to be supporting dependents than male debtors, and must therefore stretch that lower after-tax income even further.

  • So, what factors are contributing to women feeling as though considering insolvency is their only option? In our experience, there are many reasons, however, we tend to group the reasons under three main headings:

    1. Economic Gender discrimination

    2. Patriarchal design to financial services

    3. Life stages

Economic Gender discrimination

Many women-specific issues such as the Pink tax, the Wealth Gap, the Wage Gap, and time spent on maternity leave impact women’s earning power, their net worth and their eventual retirement income, disproportionately more than men. Add to that the fact that statistically women live longer than their male partners and do so on less income, and you have the perfect recipe for using debt to make ends meet.

We see women at many stages of this spectrum – whether it's those who use debt to support an expected image while in the early stages of a professional career or women who are stuck playing catch-up following a period out of the workforce to raise children seeking student loans to upskill on re-entry. Fast-forward to women in the latter stages of their careers, where the demands of a family may have subsided but the expectation of a certain standard of retirement either forces women to work longer than their male counterparts or use debt to subsidize a lifestyle.

Unfortunately, women tend to fight this issue all throughout their careers. Calling attention to these issues benefits not only women, but all of society, and strengthens the financial well-being of all Canadians.

Patriarchal design to financial services

It is well known in our industry that when a woman is in financial difficulty, she generally prefers to speak with a female about her debt options. Many women tell tales of being declined for consolidation loans, turned down on a request to remortgage or refinance, or other discouraging and potentially traumatizing financial interactions. Their stories never leave out what they perceive as an important piece - statistically speaking, the person across the desk denying the credit was almost always a male. A 2018 survey of more than 14,000 employees at 39 financial service companies shows that despite a corporate commitment to gender parity in the financial services industry, less than 20% of top executives at the companies surveyed were women.

I think to my own experiences in the debt-reduction sphere: statistics from the insolvency industry show that in 1991, 93% of Licensed Insolvency Trustees (at that time known as “bankruptcy trustees”) were male. At that time, if you were a female who was seeking advice on how to deal with your debt, it was highly unlikely that the person you were consulting with was female. Thankfully, over time, the number of female Trustees has increased – we currently sit at approximately 30% of the national membership. A point of celebration - the last graduating class of LITs was 52% female!

Traditional financial systems that rely on the debtor to research, seek out, negotiate and coordinate their details to provide to a financial professional can be intimidating, cumbersome and off-putting to women. Generally not inclined to negotiate, women often accept the first offer they are given, without realizing there may be something better, and that you always have the right to ask. When coupled with the domestic and family duties women often bear, it may be difficult for them to find the time to coordinate appointments, collect documents and financial details to provide their advisors. The design of our financial system has not kept pace with the reflection that women in today’s households, more often than not, are the decision-maker when it comes to family financial matters.

Women in business face an even greater bias – statistics show it remains more difficult for women to get business financing. In recognition of this bias, there are special programs designed to acknowledge and support women entrepreneurs and the challenges they face.

Life Stages

Certain life stages can leave a woman vulnerable to financial difficulty, and the financial impacts can be lasting. Consider the following stages and their corresponding challenges:

  • Schooling – student loan debt

  • Maternity/parental leaves – decreased income and savings

  • Parenting young children – decreased available working hours

  • Separation/divorce &/or single parenting – learning to live on a single income

  • “Sandwich generation” (caring for parents while launching teens) – time off work for appointments, supporting parental living costs while assisting with costs of post-secondary school for children

  • Widow-hood – statistically likely that females are left with lower savings after losing a spouse

While any one of these stages can generally be managed when they happen independently, they often happen concurrently. When life stages begin to intersect, financial stress often results.

Take for example, the 40-something single parent who chooses to return to school to upskill after a recent divorce. Balancing all those roles can be a challenge, and without significant savings to support the family, many women rely on debt to fill the gap.

Similarly, a recently widowed senior with limited financial literacy skills has offered to care for her grandchildren after school to help out the family and help ease her loneliness. The increased cost of groceries for the children’s snacks, and the fuel cost for her to pick up the children after school has impacted her budget to the point that she’s considering a consumer proposal to manage her debts as interest rates rise.

The ‘female factor’ when it comes to money and debt is real and has lasting impacts. As we work toward education about and understanding these issues, all members of society will benefit.

What’s Next?

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