Consumer insolvencies top 140,000 as household debt bites
Consumer bankruptcies climbed 4.6 per cent year over year, rising from 29,068 to 30,417 filings. Consumer proposals, a legal process that allows an individual to negotiate a formal settlement with creditors under revised terms, grew at a more modest 1.5 per cent, from 108,635 to 110,252.
The faster growth in outright bankruptcies is a notable shift. Consumer proposals continued to account for the majority of filings at 78.4 per cent – down slightly from 78.9 per cent in the previous period – but the gap between the two debt-relief mechanisms narrowed as household finances deteriorated.
Joshua Harris, founder of Harris & Partners, a licensed insolvency trustee firm based in Ontario, said the headline number understates the scale of financial stress.
“Nearly 400 consumer insolvency filings every day is a significant figure, but each filing represents a person or household that may have been struggling for months or even years before reaching that point,” Harris said.
“Financial difficulty does not usually begin with an insolvency filing. It can begin with relying on credit for groceries, delaying bills or cutting back on essentials simply to keep up with existing payments.”
