25 Stats You Need to Know About The Average Insolvent Debtor

Posted in Personal Bankruptcy

25-statistics-you-need-to-know-insolvent-debtorPer capita consumer insolvency rates in Ontario have fallen to a 15-year low, yet almost 40,000 individual Ontarians filed a bankruptcy or consumer proposal in 2016 alone. Here are some facts to know about the average insolvent debtor:

  1. Almost two-thirds of insolvent debtors earn an income that is in the bottom quartile of households in Ontario. Income insecurity is a primary driver of insolvencies during good economic times.
  2. Joe Debtor owes an average of $52,634 in consumer debt (excluding mortgages and secured car loans). This number is down 7% from two years ago, but it now takes less debt for Joe Debtor to reach a financial crisis.
  3. Joe Debtor is spending 41% of his household income on housing costs, more than the recommended maximum of 35%.
  4. Joe Debtor owes $1.85 in unsecured debt for every dollar he makes. His debt load is overwhelming.
  5. Joe Debtor is spending 31% of his income on personal living and expenses, which is substantially more than the recommended maximum of 20%.
  6. Joe Debtor has just $302 a month available to repay debts that cost $960 a month in interest alone. He can’t even pay the interest on this debts each month.
  7. The average debtor has more than three cards with balances in their wallet.
  8. 1 in 4 insolvent debtors use payday loans – that’s more than ever before.
  9. 15% have student debt, 1 in 5 female debtors have a student loan, twice the level of male debtors.
  10. More than half are between the ages of 30 and 39, although this group is dropping in relation to younger and senior debtors.
  11. 1 in 7 are millennials (aged 18-29); 31% have student debt while 38% owe money for payday loans.
  12. 1 in 8 are seniors (aged 60+); they owe 251% of their largely fixed income in credit card and other unsecured debt.
  13. 1 in 5 are approaching retirement with an average of $62,815 in consumer debt.
  14. More than half are families and 3 in 4 families have at least one dependent.
  15. Single parents have twice the risk of filing insolvency as two-parent households.
  16. 3 out of 4 single parent debtors are single mothers.
  17. 17% own a home, down from 24% two years ago. Homeowners with debt are turning to other options to refinance their debts and steer clear of insolvency.
  18. 1 in 10 insolvent homeowners have negative equity in their home before selling costs due to second and third mortgages. Factor in selling costs and this number jumps to 4 in 10.
  19. 30% of the calls to our office are from homeowners with significant unsecured debts.
  20. 9% are self-employed and 6% list “business failure” as a cause of their insolvency.
  21. Joe Debtor has little in the way of retirement security. Only 44% have any RRSP savings and those who do have saved an average of just $14,260.
  22. Joe Debtor has no emergency fund. Less than 1% have any cash or equivalent savings.
  23. Half of all vehicles were financed; 34% of all financed vehicles had an average loan shortfall of $9,385.
  24. 55% list “job insecurity” (temporary or permanent, job loss, salary/hourly reduction) as a primary cause of their insolvency.
  25. 14% list “health” as a cause of their insolvency and 5% are on disability.

These are fast facts that provide a snapshot of the average Ontario insolvent debtor. If you’re looking for detailed information on the different risk groups, visit joedebtor.ca.

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