Personal Bankruptcy Filing Rate Increases in Ontario in 2009
The Office of the Superintendent of Bankruptcy reports that the number of consumer bankruptcies increased by 28.5% in Ontario in 2009, and the number of consumer proposals increased in Ontario 2009 by 43.3%. In 2009, 46,521 Ontario residents filed personal bankruptcy, and 20,414 Ontario residents filed a consumer proposal, for a combined 66,935 consumer filings, the largest number on record. This follows increases in both 2007 and 2008.
The rate of growth in consumer filings in 2009 in Ontario was 32.7%, slightly higher than the Canadian average of 31% overall growth.
Hardest hit in Ontario was Brampton with a 48% increase, followed Brantford and Barrie, both at 40%, and Kitchener at 39%.
The rate of personal bankruptcy filing dropped significantly after September 18, 2009 when the new bankruptcy rules came into force, increasing the cost and length of a bankruptcy for bankrupts with surplus income. The debt limit for eligibility to file a consumer proposal was increased, increasing the attractiveness of a consumer proposal as a debt management option. As a result, there was a spike in bankruptcy filings in the two weeks prior to September 18, as debtors rushed to file bankruptcy to take advantage of the old rules. After September 18 the number of bankruptcies filed dropped, while consumer proposal filings continued to increase.
We project that in 2010 the number of bankruptcy filings will increase by a small amount, but the number of consumer proposals filed will increase substantially, leading to a historically high percentage of consumer proposals filed in 2010.
For many residents of Ontario a consumer proposal or a personal bankruptcy may be the only logical solution to their money problems in 2010.
For more information on personal bankruptcy statistics for 2009 see our article bankruptcy statistics for 2009 and 2008, with detailed personal bankruptcy statistics for major cities in Ontario.