Bankruptcy – Canadian Insolvency Statistics
Canada’s bankruptcy rate has risen over the last five years as set out below:
Bankruptcies and Proposals: 2012-2016
| Bus. Bank.
Canada’s bankruptcy rate has been falling over the last few months of 2017, in reaction to Canada’s strong economy.
Canada’s spending gap is less than 1 percent, the lowest among the Group of Seven nations after Germany.
Canada’s growth rate was 4.5 per cent annualized in the second quarter.
In the statistics for July, 2017, published on September 29, 2017 insolvencies for the 12 months ended July 31, 2017 fell by 1.4%.
For the 12 months ended June 30, 1917 they were down 1.9%.
For the 12 months ended May 31, 2017 they were down .7%.
Historically some of the Canadian insolvency statistics on who files for bankruptcy has been;
43% of debtors were married or living in a common law partnership –
I recently saw a couple, with two children, where the husband had been downsized from his job.
It had taken him almost a year to get another job but this one was only at half of what he made before.
Jenny, his wife, had gone back to work at an entry level job.
Between them they were making less than he had earned before the downsizing.
They were living within their means but owed $35,000 they could not repay.
John was under extreme pressure. Collectors were calling him at work and he worried that if his boss found out he would be fired.
I reviewed their finances including their assets and told them that there was a solution.
I showed them how a bankruptcy would solve their problems:
- Once they filed I told them I would contact the creditor who was calling John at work and stop the calls, including any potential wage garnishee;
- Their earnings only required a payment of $1,800 payable at the rate of $200 per month;
- They would keep all their assets and he would be out of bankruptcy in nine months.
I told them to think things over and to call me if they wanted to proceed.
I received a call from John the next morning and we arranged for him to come to my office that day, after he finished work, to sign the forms.
It is now 10 months later.
The bankruptcy proceeded without incident. The collection calls stopped. No meeting of creditors was required.
John made his $200 a month payments on time and he was discharged after nine months.
15% of bankrupts were unmarried with a dependent under the age of 21
Josie was 40 years old with a child of 10 years. She had been divorced two years ago and has been able to make ends meet, although it has been a struggle.
Then, about six months ago her ex stopped making his maintenance and child support payments.
Josie said that he had moved out of province and was refusing to make any more payments.
Josie had contacted family maintenance, who were pursuing him for payment but to date they were unsuccessful.
Josie earns $2,800 a month. She owes $20,000 and said she had cut back on her expenses so was now living within her means but could not afford to repay the $20,000.
I reviewed her financial information and told her that a bankruptcy would erase her debt. She would be in bankruptcy for nine months and the cost would be $1,800 payable at the rate of $200 a month for nine months. She would also keep all her assets.
The financial crises of the John and Jenny and of Josie are typical of many people who are forced to file for bankruptcy. One of the tenets of Canadian bankruptcy law is that poor but honest debtors are deserving of a fresh financial start.
You will note that in both cases all their assets were retained. The exemptions are set by the provinces and are meant to aid in the fresh financial start and to help maintain the dignity of the debtors.