A new study has found that about half of all insolvencies filed in Canada during 2022 were by members of the millennial generation.
While the millennial generation accounts for only about a quarter (25%) of Canada’s population aged 18 and older, a study by insolvency trustees Hoyes, Michalos and Associates found that 49% of all insolvencies in Canada last year were filed by millennials.
The study found that the average insolvent millennial is 33 years old and is 1.7 times more likely than Baby Boomers and 1.4 times more likely than Generation X to declare themselves financially insolvent.
Millennials had an average unsecured debt load of $47,283 in 2022, which did not include mortgage debt.
Student loans accounted for 30% of the unsecured debt held by the age group, according to the study. The average student loan debt was $16,725.
About 55% of Canadian millennials held debt from at least one high-cost loan, with an average debt of $11,940. Credit card debt was held by 87% of millennials involved in the study, with the average credit card debt totaling $13,948.
Other findings from the study included increased reliance on rapid high-cost loans such as payday loans, high-interest lines of credit, and installment payment plans.
Millennials are considered people born between 1981 and 1996. Insolvencies refer to situations where a person or business cannot pay back the debts they owe.
In cases of insolvencies, people or businesses may seek credit counselling, debt consolidation, or, in extreme cases, file for bankruptcy.
The study relied on data from 2,700 personal insolvencies in Ontario between January 1, 2022, and December 31, 2022. The results from 2022 were compared against previous studies dating back to 2011.
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