2005 was a record year for bankruptcy in Canada

In 2005, for the first time in Canadian history, more than 100,000 Canadians filed a personal bankruptcy or consumer proposal. That means that if you were in a room with 250 Canadian adults, statistically one of them went bankrupt last year.

Why is the bankruptcy rate so high? One reason is that Canadians are carrying the highest level of personal debt in Canadian history. The average Canadian now owes 118% of what they earned last year, the highest level ever. As long as interest rates stay low and there are no unpleasant surprises, most people can afford to make their monthly payments. For families at their limit, however, a high debt-to-income ratio means they are less able to deal with life’s unexpected financial traumas.

Every day I meet with people who have gone through a job loss, reduced overtime, a marriage break up, or even a medical problem that prevents them from working. When your debts are high, any unexpected life event can cause severe financial distress.

Our research indicates that the personal bankruptcy rate in Canada will continue to increase. We are predicting a growth in consumer insolvencies of 3 to 5% over the next two years. Every 1% increase means another 1,000 people and families dealing with financial hardship.

If you want more information, read our six page Special Report, 100,000+
Consumer Insolvencies in 2005: Many Canadians Teetering on the Brink of Financial Distress by Hoyes-Michalos.

You can find more information at these links:

• Commentary on 2005 Bankruptcy Statistics by Hoyes-Michalos
• Annual Consumer Bankruptcy Report – 2005 – Detailed Analysis by Hoyes-Michalos
• Special Report: 100,000+ Consumer Insolvencies in 2005: Many Canadians Teetering on the Brink of Financial Distress by Hoyes-Michalos
• Comparitive Bankruptcy statistics for 2005 and 2004, by major city in Ontario, as summarized by Hoyes-Michalos
• Office of the Superintendent of Bankruptcy’s web site, official source for bankruptcy statistics
• An explanation of personal bankruptcy
• An explanation of consumer proposals
• Hoyes Michalos Bankruptcy Blog – update on current bankruptcy issues
• The Bankruptcy-Canada.ca Blog – over 700 questions asked by ordinary Canadians, with
  answers.

Don’t become a statistic. If you have more debt than you can handle, contact us today, and one of our trustees will meet with you to review your options.

About J. Douglas Hoyes

J. Douglas Hoyes, BA, CA, CIRP, CBV, Licensed Bankruptcy Trustee, Co-Founder of Hoyes, Michalos & Associates Inc. Doug has appeared on Canada AM, Till Debt Do Us Part, CBC Newsworld and numerous other TV and radio programs talking about debt management options.

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