Canadian Consumer Debtor Profile

In 2024, the household insolvency rate reached its highest level since 2019. According to data from the Office of the Superintendent of Bankruptcy (OSB), more than 137,000 Canadians filed for insolvency, nearly 80% of them in the form of consumer proposals.

These figures reveal a worrying picture: the average Canadian is more indebted, more vulnerable to increases in the cost of living and has fewer and fewer budgetary margins.

Insufficient income to cover expenses

The median monthly income of indebted households in Canada was $3,089, compared with $7,050 for the general population, according to Statistics Canada.

Despite modest incomes, the median monthly expenditure reaches $3,264, generating an average deficit of $175 per month.

In other words, insolvent Canadians spend more than they earn, often on essentials such as housing, food, transport and medication.

The categories of expenditure most affected by the rise in costs are :

• Transport (+33%), particularly petrol and car maintenance;

• Living expenses (+21%), due to food inflation;

• Housing, which alone accounts for nearly 45% of the monthly budget of indebted households.

All generations are affected

The average age of the typical debtor is 46, but the profiles vary according to age group:

Almost 11% of insolvency cases now involve seniors, an emerging and troubling development.

Debt dominated by consumer credit

Nearly 9 out of 10 people who filed for insolvency held one or more credit cards.

The median debt per card was $13,359, more than any other loan category.

Other current liabilities :

• Bank loans: 57% of debtors, median debt $20,000;

• Loans from credit companies : 51%, median debt $13,478;

• Tax debts: 38% of insolvent households, median debt $6,440;

• Student loans: 17% of files, median debt $11,702.

On average, the total value of debts reached $53,997, for median assets of just $15,142, giving a net imbalance of almost $39,000.

Few owners, many debts

Only 14% of insolvent debtors are homeowners, compared with 56% of the general population.

This figure confirms that home ownership does not protect against debt:

Rising interest rates, onerous mortgages and high maintenance costs are putting many households, especially middle-income families, at risk.

The most common causes of insolvency

The five main reasons given by people in debt are :

1. Loss of income (45%);

2. Health problems (20%);

3. Breaking up or separation (11%);

4. Financial help for a loved one (7%);

5. Entrepreneurial failure (6%).

These situations reflect growing economic vulnerability, especially for households whose budgetary leeway is already limited.

When should you consult a licensed insolvency trustee?

When faced with a chronic financial imbalance, consulting a syndic can help you assess your options before it's too late.

The main legal solutions are :

• The consumer proposal, to pay off part of your debts without losing your assets.

• The debt consolidation, to consolidate your payments at a reduced rate.

• The personal bankruptcy, as a last resort to start afresh.

At Mallette, our licensed insolvency trustee accompany Quebecers every step of the way, offering realistic, humane and confidential plans.