Personal bankruptcies up 16% year-over-year as Canadians battle inflation

Jan 6 2023, 9:46 pm

Many more Canadians are declaring bankruptcy this year compared to last year as the nation faces soaring inflation rates coupled with the threat of a looming recession.

Consumer insolvency filings have increased 9.5% over the last 12 months, according to the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).

In November 2022 alone, consumer insolvencies were up 16% compared to the same month in 2021.

“As Canadians grapple with incoming holiday bills on top of the ballooning costs of everyday expenses, CAIRP is urging Canadians to beware of unregulated, unlicensed debt advisors that claim to be authorized to assist with insolvency options,” the agency said.

It urged Canadians struggling with their finances to seek out government-regulated licensed professionals, and avoid those who may mislead them into paying unnecessary fees for debt relief. The professional credential is called Licenced Insolvency Trustee (LIT).

“Financially distressed consumers may be targeted by those who falsely claim to be able to slash their debt, which is why it is critical they seek debt advice from reputable professionals,‚ÄĚ Andr√© Bolduc with CAIRP said. ‚ÄúMany households overextend themselves on holiday spending, and this year, inflation could very well amplify the consequences of that spending, tipping them into the red.”

This year, nearly 100,000 Canadians declared bankruptcy, up from 90,700 last year.

CAIRP says some signs you may be in financial distress include missing one or more bill payments, receiving harassing calls from creditors, living on credit, living paycheque-to-paycheque, paying only the minimum on bills, depleting savings to get by, living without a budget, or having financial struggles impact relationships or mental health.

Megan DevlinMegan Devlin

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