Statistics show that personal bankruptcies in Canada are on the rise.
If you’re struggling with debt, here’s a useful guide to bankruptcy and some tips to help you get back on track.
Recent figures from the Office of the Superintendent of Bankruptcy Canada show that there has been an increase in insolvencies in the last 12 months.
Insolvencies include personal bankruptcies and consumer proposals.
In the 12-month period leading up to February 2019, the total number of insolvencies rose by 9%.
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What is a personal bankruptcy?
The reality is that anyone can get into serious debt.
It is estimated that 100,000 Canadians file for bankruptcy or submit a consumer proposal every year.
A personal bankruptcy is a solution, which can help people who cannot afford to pay bills and meet repayments to get out of debt.
This is an insolvency measure, which is suitable for those who are in a situation where their circumstances are unlikely to change.
If you can’t afford to keep up with payments, your income has dropped and your debts are increasing month on month, bankruptcy could offer a way out.
It is essential to note that bankruptcy is not the only means of dealing with debt, and there are alternative options available, including debt consolidation, working with credit counsellors to come to arrangements with creditors and filing a consumer proposal.
Personal bankruptcies in different parts of Canada
When analysing insolvency statistics in Canada, it is interesting to note regional differences.
Data from the Office of the Superintendent of Bankruptcy suggest that personal bankruptcy application rates are highest in Ontario, where there was a 15.4% increase in 2018.
Quebec has the second-highest number of applications, but figures only increased by 2.7% in 2018.
Application numbers increased by 15% in both Newfoundland and Labrador.
Is personal bankruptcy the best option?
There are several solutions that can help people climb out of debt, and bankruptcy is generally considered to be a last resort, which is recommended for individuals who cannot benefit from other measures.
Personal bankruptcy may be advisable for people who have mounting debts with no way of reducing the amount or making future payments.
One option that might be worth considering for some people in a challenging financial situation is a consumer proposal.
Consumer proposals are becoming more commonplace across Canada.
This type of arrangement involves the debtor entering into a legal agreement with creditors to pay part of an outstanding debt, and it can be an effective alternative to bankruptcy.
More and more people are filing for personal bankruptcies in Canada.
If you’re in debt and you can’t see a way forward, or you have questions about bankruptcy, we are here to help.
We have a friendly, experienced team on hand to respond to queries and provide tailored advice.
Bankruptcy might be an option, but there may also be alternative measures worth exploring.
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