Hoyes Michalos Bankruptcy Study

The Covid-19 pandemic continued to have a large impact on the consumer insolvency cycle in Canada in 2021. While consumer insolvencies normally increase during periods of economic downturn, total insolvency filings remained depressed through 2021. Ontario insolvencies declined 10.8% year-over-year, while Canadian volumes fell 6.6%. Consumer insolvencies are now close to a third below pre-pandemic levels.

Still, more than 90,000 Canadians and 30,000 Ontarians, filed a bankruptcy or consumer proposal in 2021. Our most recent bankruptcy study provides insight into who was filing insolvency during the pandemic and why.


As required by law, we gather a significant amount of information about each person who files with us. We examine this data to develop a profile of the average consumer debtor who files for relief from their debt (we call this person “Joe Debtor”). We use this information to gain insight and knowledge as to why consumer insolvencies occur. Our 2021 consumer debt and bankruptcy study reviewed the details of 3,900 personal insolvencies in Ontario from January 1, 2021, to December 31, 2021, and compared the results of this profile with study results conducted since 2011 to identify any trends.

Key Findings

The average insolvent debtor in 2021 owed $50,484 in unsecured debt, up 3.3% from 2020 and the highest level we’ve seen since 2016.

Canadians were less likely to file a bankruptcy or consumer proposal due to credit card debt and personal loans in 2021. Average credit card balances among all insolvent debtors declined 9.3% compared to the prior year, while personal loans fell 2.0%. This is consistent with overall consumer debt behaviour during the pandemic where consumer credit, particularly credit card debt, fell as households paid down balances and borrowed less.

What drove the increase in average unsecured debt in 2021 was an increase in tax obligations and student loan debt among insolvent debtors.


Tax debts have returned as a primary debt driver of consumer insolvencies in 2021, with 4 in 10 insolvent debtors owing taxes at the time of filing. This is despite a slowdown in collection action by the Canada Revenue Agency (CRA) and the implementation of a temporary interest holiday on past-due taxes.

  2019 2020 2021
Percentage of filers with tax debt 37% 33% 40%
Average taxes owing1 $20,013 $15,866 $19,776
Taxes as a percentage of unsecured debt1 31% 25% 31%
1-Among those with tax debts

Tax debtors owed an average of $19,776 in taxes and interest, up from a low of $15,866 the prior year. Taxes owing can include personal income tax, HST, source deductions and property taxes. Much of the increase in tax debtors in 2021 was due to obligations created by CERB and CRB payments made in 2020 with no or insufficient tax withheld at source. Additionally, many self-employed and small business debtors stopped making HST payments to manage cash flow during the pandemic. With prolonged lockdowns and reduced revenue, these individuals were unable to catch up on skipped remittances.

Tax debts are unsecured in a bankruptcy or consumer proposal unless the Canada Revenue Agency has registered a lien on the debtor’s assets before filing. As an unsecured debt, taxes are discharged through personal bankruptcy and settled through a consumer proposal. A consumer proposal is the only option that allows the CRA to accept an offer to repay less than the full amount of a debtor’s assessed tax return obligation (taxes owing before interest and penalties).

Insolvent tax debtors owed, on average, $63,572 in total unsecured debt, 25.3% more than the average insolvent debtor. More than 1 in 10 (11%) are self-employed and 7% listed business failure as a cause of their insolvency (versus 4% for the average debtor). Debtor income for those with tax debts fell 6.3% (versus 2.0% for all debtors), and 17% were unemployed (versus 15%).

We believe that this increase in tax insolvencies is the tip of the iceberg. We expect three changes in 2022 that will likely increase tax-driven insolvencies even further:

  1. Stronger CRA collection actions on tax debts will resume. During much of 2021, CRA was limited in its ability to enforce collection. With collection agents working from home, the ability to issue Requirements to Pay, garnishment notices, or freeze bank accounts was limited, and CRA policy seemed to remain soft on collection activity during much of the pandemic. This cannot continue indefinitely, and we have already seen a slight uptick in collection behaviour by the CRA. We expect more aggressive action to resume in 2022.
  2. Ending of interest relief on Covid-19 benefit tax obligations. Individuals with a taxable income of $75,000 or less who received Covid-19 benefits in 2020 automatically received interest relief on outstanding tax obligations for 2021 tax filings. This program is set to expire on April 30, 2022, and some taxpayers will be unable to pay their 2021 taxes owing.
  3. Upcoming 2021 tax filing obligations. With the upcoming filing deadline for 2021 taxes, more Canadians will face an outstanding tax bill when they file their taxes, especially those who received continued Covid-19 benefits.


Student loan repayment has been an increasing reason for filing insolvency since we began our study in 2011, reaching a record level in 2021 with 22.3% of insolvent debtors having student loan debt.

chart of insolvent debtors with student loans

The federal government has waived interest on Canada Student Loans until March 2023. They also made repayment assistance programs easier to access, lowering or eliminating repayment needs for lower-income households. OSAP payment deferrals were available from March 30 through September 30, 2020. Despite this, job insecurity has created a financial environment that makes repayment of student loan debt impossible for an increasing number of graduates.

Student Debta 2019 2020 2021
% with student debt 19.0% 20.4% 22.3%
Average student debt $14,850 $15,251 $17,005
Total unsecured debt $47,910 $49,509 $52,112
Average age 34.8 35.2 36.0
a – those with student debt

Average student loan debt among those filing with student loans was $17,005, up a staggering 11.5% and the highest level since we began our study in 2011. Payment deferrals may have contributed to this increase. On top of this, a student loan debtor owed an additional $35,107 in credit cards, bank loans, payday loans and other unsecured debt. Student debtors are highly likely to turn to payday loans, with 44% carrying at least one payday loan.

It is important to understand that an insolvent student debtor is not a recent graduate. She (61% of student debtors are female) is, on average, 36 years old and has been out of school for 13 years or more. Under Canadian bankruptcy law, student loan debt is not automatically discharged by bankruptcy or a consumer proposal unless the debtor has been out of school for at least seven years.

Student loan debt is a problem that is not going away. The pandemic has made repayment conditions worse for many millennials who are more likely to work in precarious employment impacted by Covid-19 lockdowns.

2021 Consumer Debtor Profile: The Average Insolvent Debtor

Below is a summary of debtor characteristics from our 2021 insolvency study.

Joe Debtor 2020 2021
Personal Information    
Male 52% 51%
Female 48% 49%
Average age 42.9 42.3
Marital status    
Married/Common-law 32% 31%
Divorced or Separated 23% 21%
Widowed 2% 2%
Single 43% 46%
Average family size (including debtor) 2.0 2.0
Single-person household 51% 52%
Likelihood of having dependent(s) 35% 36%
Likelihood of being a lone-parent 17% 17%
Average monthly income (debtor) $2,646 $2,593
Total unsecured debt $48,894 $50,484
Unsecured debt-to-income 154% 162%
Likelihood they own a home 5% 3%
Average mortgage value (homeowner) $331,810 $375,888


  • The 2021 insolvent debtor owed an average of $50,484 in unsecured debt and an additional $8,700 in non-mortgage secured debt (primarily a car loan or lease).
  • He is only slightly more likely to be male (51%) and is 42.3 years old, slightly younger than 42.9 in 2020.
  • Almost one-half are single (46%), 31% are married, 21% are separated or divorced, and 2% are widowed.
  • More than 8 in 10 (81%) live in a one-income household. The average household size is 2.0, 36% have dependents, and 17.1% of households are headed by single parents.


The average insolvent debtor in 2021 owed $50,484 in unsecured debt, up 3.3% from 2020.

Consumer Debt Profile 2019 2020 2021
Personal loans $18,592 $20,553 $20,142
Credit card debt $14,885 $16,548 $15,004
Tax debts $7,424 $5,208 $7,826
Student loans $2,817 $3,114 $3,797
Other unsecured debt $5,243 $3,470 $3,715
Average unsecured debt $48,963 $48,894 $50,484
Other secured debt $9,960 $9,661 $8,700
Total consumer credit $58,923 $58,555 $59,183
  • 86% of debtors had credit card debt with an average balance of $17,413 on 2.8 cards. Average credit card balances fell 5.3%.
  • 38% had at least one payday loan, unchanged from prior years. Average payday loan debt among those with a payday loan was $6,426, down 1.7%.
  • 22% had student debt, up from 20% in 2020. Average student loan debt (among those with student loans) increased 11.5% to $17,005.
  • 40% had tax debt, up from 33% in 2020. Average taxes owing (those with tax debts) was $19,776, up 24.6%.
  • 3% were homeowners with an average secured mortgage of $375,888 (up 13.3%)
  • 65% had a vehicle with an average value of $12,324.
    • 39% owned their vehicle with an average value of $4,374, well below the allowable exemption limit.
    • 61% had a financed vehicle with an average value of $17,512, against which was $16,910 in car loan debt.
    • One-quarter (25%) of financed vehicles had negative equity, with an average negative equity of $10,716.
  • 36% had RRSP savings with an average balance of $1,394.


The pandemic has changed the work profile of the average debtor. Historically, 80% of insolvent debtors were employed at filing. In 2021:

  • 70% of debtors were employed, a record low
  • 15% of debtors were unemployed
  • 6% were retired
  • 9% were disabled, on maternity leave or other

Almost one-half (47%) of all debtors listed job loss, business failure or income reduction as a primary cause of their insolvency.

Average debtor income fell 2.0% to $2,593.  Average household income dropped 2.6% to $3,000.

  • Housing costs accounted for 44% of total household income, up from 42% in 2020, above the recommended maximum of 35%. Average monthly rent or mortgage payments increased 2.9% to $1,008
  • Transportation costs totaled 19% of average household income
  • Other personal and living expenses accounted for 30% of household income

Insolvent debtors in 2021 were left with just $203 a month (a record low) to pay interest and principal payments on $59,183 in consumer credit. The interest alone on this level of debt for the average debtor amounts to more than $1,200 per month.

Canada’s average debt-to-disposable income ratio was 177.2%1 in the third quarter of 2021. This number includes both mortgage debt and consumer credit. The consumer credit portion of this ratio was 38.2%2. The average insolvent debtor had a consumer debt-to-income ratio of 190%, more than five times the national average.


Below are some highlights of key debtor characteristics by age group.

Age Distribution 2019 2020 2021
18-29 16.5% 16.5% 16.4%
30-39 30.5% 29.5% 31.9%
40-49 24.6% 24.3% 23.9%
50-59 17.4% 18.1% 16.3%
60+ 10.9% 11.7% 11.6%

18 to 29

Debtors aged 18 to 29 accounted for 16% of all insolvencies, relatively unchanged from 2020 (16.5%). On average, they owed $31,195 in unsecured debt, down 7.1% from the prior year.

Debtors in this age group were more likely to be male (54%), and three-quarters (75%) were single.

Debtors 18 to 29 years old were most likely to use payday loans, with more than one-half (52%) carrying at least one payday loan at the time of insolvency. One-third (33%) carry student debt, although their student loan balances are one-half that of debtors aged 30 to 39.

1 in 5 (20%) were unemployed at the time of filing, the highest among all age groups, yet average income among those aged 18 to 29 increased 1.2%, likely because of continued pandemic supports. Debtors in this group were most likely (46%) to report job and income loss as a primary cause of their financial problems.

Debtors aged 18-29 were also most likely to carry negative equity vehicle loans. Of those with an encumbered vehicle, almost 2 in 5 (37%) owed more than their vehicle was worth, the highest of all age groups.

30 to 39

Debtors aged 30 to 39 continue to make up the highest percentage of those filing insolvency, accounting for 32% of all filings. They owed on average $47,251 in unsecured debt, up 2.2%.

Debtors in this age group are evenly split by gender. Additionally, 52% are single, while 22% are single parents.

Debtors in their 30s have the highest frequency (34%) and size ($21,530) of student loan debt. If they carry student loan debt, they are also more likely to have payday loans (45%). Women are more likely to struggle with student loans than males in this age group. (42% versus 25%).

Debtors aged 30 to 39 were the only age group to increase credit card debt, up 2.2% (those with credit card debt).

40 to 49

Debtors aged 40 to 49 accounted for 24% of all insolvencies, the lowest level since 2011 when we began our study. They owed on average $56,521 in unsecured credit, up 5.9%.

Debtors in this age group were more likely to be female (52%) and reported the highest percentage of single-parent households (24%, 33% among females in their 40s). This age group was most likely to cite marital issues (20%) as a reason for their financial difficulty, with little difference between male (19%) and female (21%) debtors.

Debtors in this age group also reported the largest drop in income, with debtor income down 4.3% and household income down 4.7%. They were most likely to be self-employed (9%), with 41% filing with tax debt.

50 to 59

Insolvency filings among those aged 50 to 59 fell to 16% of all filings, the lowest level since we began our study in 2011. Debtors in this age group owed an average of $59,766 in unsecured debt, up 10.4%, the largest growth rate among all age groups.

Debtors in their 50s were more likely to be male (54%) and were most likely to be divorced or separated (35%).

Those aged 50 to 59 were most likely to have tax debt (47%). They were most likely to mention business failure (6%) as a cause of insolvency. Household income fell 4.6%, second only to those aged 40 to 49.

Debtors aged 50 to 59 had the highest average payday loan balances ($7,862) among all age groups. However, they also had the highest drop in credit card debt, down 7.2%.


Debtors aged 60 and older accounted for 12% of all insolvencies. Senior debtors were more likely to be female (53%) and are relatively evenly split by marital status (28% single, 33% married, 27% divorced).

Debtors in this age group have the highest level of unsecured debt at $61,223. Credit card debt accounted for 34% of their total unsecured debt, the highest among all age groups, although average balances fell 6.1%. They also had the highest dollar amount of tax debt – $44,410 among those with tax debts (39%).

Although 48% are retired, 34% continue to be employed. More than 1 in 5 (21%) had at least one payday loan.


The trend continued towards gender parity in insolvency filings in 2021, with 49.3% of insolvencies filed by women, the highest rate since we began our study.

chart showing insolvencies by gender

  • Male debtors owed, on average, $53,664 in unsecured debt, 13.7% more than the average female debtor.
  • Female debtors saw their average unsecured debt increase 6.5%, while male debtors’ unsecured debt increased only 0.7%
  • Female debtors are more likely than male debtors to have dependents (43% versus 29%) and are more likely to be single parents (26% versus 9%)
  • Female debtors are more likely to struggle with student debt (27%) than male debtors (17%)
  • Male debtors are slightly younger (42.0) than the average female debtor (42.7)
  • Male debtors are more likely to have tax debts (42% versus 37%)
Jane/Joe Debtor Female Male
% of all debtors 49% 51%
Average age 42.7 42.0
Unsecured debt $47,208 $53,664
Non-mortgage secured debt $8,468 $8,925
Average debtor income $2,478 $2,703
Average household income $2,908 $3,090
Unsecured debt-to-income 159% 165%
% unemployed 14% 16%
% single 45% 47%
% married 29% 33%
% divorce 22% 19%
% with dependent(s) 43% 29%
% lone-parents 26% 9%
% with student debt 27% 17%
Average student debta $16,462 $17,837
% with payday loan debt 38% 37%
Average payday loan debta $6,202 $6,648
% with tax debt 37% 42%
Average tax debta $18,435 $20,946
a – those with student loans, payday loans, or tax debt    


Media Inquiries

If you would like to request an interview or need background information, please contact:
Email Doug: doug@hoyes.com
Email Ted: ted@hoyes.com
or phone 1-866-747-0660.

How to cite: Hoyes, Michalos & Associates Inc. Annual Bankruptcy Study, 2021. Published February 14, 2022. https://www.hoyes.com/press/joe-debtor/

Douglas Hoyes, CPA, Licensed Insolvency Trustee, Co-founder Hoyes Michalos.

Doug was inspired to bring his financial experience to work by helping individual people not corporations rebuild their financial future. Doug advocates for consumers needing debt relief to ensure they receive a fair and respectful debt management solution. He regularly comments in the media including publications and networks such as Canada AM, Global News, CBC, The Globe and Mail, The Toronto Star, Business News Network, The Financial Post and CTV News. Doug also posts regularly to our blog, on Twitter, Google+, and Huffington Post Canada.

Ted Michalos, CPA, Licensed Insolvency Trustee, Co-founder Hoyes Michalos

Ted Michalos strongly believes that debt management advice should be delivered without gimmicks and without tricks. He is enthusiastic about ensuring clients understand all of their options and that Hoyes Michalos helps them develop a custom-tailored plan to deal with their debts. Ted is a prolific writer, contributing answers and advice on our blog and on several insolvency and debt relief sites, including Advisor.ca. He has appeared as an expert on bankruptcy and debt-related matters including appearances on CBC News, Global TV and Business News Network.

Company Background

Hoyes, Michalos & Associates Inc. is a Licensed Insolvency Trustee firm that has provided personal bankruptcy and consumer proposal services to individuals in Ontario since 1999. Co-founded by Doug Hoyes and Ted Michalos, we are one of the largest firms in Canada practicing exclusively in the area of personal insolvency. With offices throughout Ontario, Hoyes Michalos provides real debt management solutions to help Ontarian’s climb out of debt.

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If you would like to request an interview or need background information, please contact:
Email Doug: doug@hoyes.com
Email Ted: ted@hoyes.com
or phone 1-866-747-0660.

External Sources:

  1. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3810023801
  2. Calculated by Hoyes, Michalos from data available on https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3810023801