A growing proportion of Canadians are experiencing first-hand the market effects of consumer insolvencies, according to a recent report from the Office of the Superintendent of Bankruptcy.
The bureau warned that more and more households are forced to declare themselves in ruinous debt, amid elevated prices and a sustained pace of interest rate hikes. The nationwide volume of consumer insolvencies (bankruptcies and proposals) saw a 9.2% year-over-year increase in October, and 16.4% from September.
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This was particularly apparent in Prince Edward Island, which experienced the largest annual growth (20.8%) in the number of insolvencies.
British Columbia came not far behind with a 19.7% year-over-year increase. Other double-digit markets of concern were Saskatchewan (up 15.9%), Alberta (up 12.3%) and New Brunswick (up 10.6%).
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“High consumer debt levels and rising interest rates have been a growing concern over the last few years and we are now starting to see this reflected in the number of insolvent Canadians filing bankruptcies or proposals,” Canadian Association of Insolvency and Restructuring Professionals (CAIRP) chair Chantal Gingras said.
In the 12 months that ended on October 31, 2018, consumer insolvency filings accounted for 97.2% of insolvencies filed during the period – and there are no signs of the trend stopping any time soon.
“With interest rates trending upward since 2017, we expect the uptick in consumer insolvencies to continue into 2019 and beyond,” Gingras added.
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