There is a concern that more Canadians are reaching their financial breaking point as bankruptcies across the country have increased significantly.
The latest bankruptcy and insolvency data released by the Office of the Superintendent of Bankruptcy Canada (OSB) found consumer insolvency filings in Canada rose 22.5% in this year’s third quarter compared to the same quarter last year.
This is the highest increase in 13 years.
The third quarter rose 2.3% compared to this year’s second quarter.
Filings are still 25.5% lower than pre-pandemic levels in 2019.
Meanwhile, business insolvencies are up 48.5% during this year's third quarter compared to last year — which is the largest percentage increase in 35 years of records.
“The concern is that more Canadians are reaching their breaking point financially, and as many desperately search for solutions to their debt problems, they may be lured by unrealistic promises to quickly solve their debt problems or fix their credit score,” says André Bolduc, Licensed Insolvency Trustee and Vice Chair of Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
“Unfortunately, those promises can end up being too good to be true.”