Personal bankruptcies increased by 22.5% in the third quarter compared to 2021


There are fears that more Canadians are reaching their financial breaking point as bankruptcies across the country have increased dramatically.

The latest bankruptcy and insolvency data released by the Office of the Superintendent of Bankruptcy Canada (OSB) revealed that consumer insolvency filings in Canada increased by 22.5% in the third quarter of this year compared to in the same quarter last year.

This is the largest increase in 13 years.

The third quarter increased by 2.3% compared to the second quarter of this year.

Deposits are still 25.5% below pre-pandemic levels in 2019.

Meanwhile, business insolvencies rose 48.5% in the third quarter of this year compared to last year – the biggest percentage increase in 35 years of records.

“The problem is that more and more Canadians are reaching their financial breaking point, and as many are desperate for solutions to their debt problems, they may be lured in by unrealistic promises to quickly resolve their debt problems. debt problems or improve their credit score,” explains André Bolduc, Licensed Insolvency Trustee and Vice-President of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).

“Unfortunately, these promises may end up being too good to be true.”

CAIRP urges Canadians in financial difficulty to speak with licensed, government-regulated professionals.

Some unlicensed debt counselors can result in unknowing Canadians being charged hundreds or even thousands of dollars for unnecessary or unauthorized services.

Instead, Canadians are encouraged to speak to a Licensed Insolvency Trustee (LIT) if they are considering a consumer proposal or bankruptcy.

“LITs provide independent and impartial advice on debt management options and they are required to discuss all available options to resolve financial difficulties, including insolvency and non-insolvency options,” explains the ACPIR.

Usually, initial consultations with SAIs are free, “so that people facing debt problems can get advice without obligation and without initial costs”.

“Those struggling with debt have three main options: they can get relief through bankruptcy; formulate a consumer proposal; or seek debt advice.

“Licensed Insolvency Trustees take a personalized approach to helping people make the best debt resolution decision for their situation. For people in serious financial difficulty, a consumer proposal or bankruptcy may be the best solution.


Jean-Daniel Breton, president of CAIRP, encourages business owners to learn about their options if they need help with their business, because closing their doors is not the only solution.

“When a business is struggling with debt, the best recourse is to speak to a Licensed Insolvency Trustee. They can assess the unique financial and operational aspects of the business to provide advice that can help make the business viable again and help business owners develop a restructuring and turnaround plan that meets everyone’s needs. stakeholders,” Breton said.

“Or if the business is debt-ridden and no longer viable, they can provide options to formally close the business and manage the liquidation process while ensuring a balance between the rights of creditors and debtors.”

Bankruptcies increased the most in the 12 months to September 30 in the accommodation, food service and construction sectors.

The mining, oil and gas extraction, and finance and insurance sectors recorded the largest declines.


About Author

Comments are closed.