Canadians are accumulating record amounts of debt as the economy weakens.
The average insolvent Canadian owed a record $67,496 in unsecured debt during 2025, according to Hoyes, Michalos & Associates, an insolvency trustee.
Unsecured debt in Canada rose 11.2% last year and is up 37% over the past three years.
Unsecured debt refers to loans not backed by collateral such as a home or car. It is most often credit card debt but can also include student loans and unpaid utility bills.
According to the Office of the Superintendent of Bankruptcy, consumer insolvencies in Canada rose 2.3% in 2025, totalling 140,457 for the year, up from 137,295 in 2024.
The average Canadian filing for bankruptcy in 2025 owed money to 10 different lenders or organizations, the most since 2023, said Hoyes, Michalos & Associates.
Debtors are also juggling an average of 3.5 credit cards each, up 13.3% year-over-year.
Canadians’ use of payday loans, which are short-term, high-interest obligations, are at their highest level ever, with the typical user holding an average of five loans.
Homeowners are also running into trouble. In 2025, homeowners accounted for 8% of all bankruptcies in Canada, up from 5% in 2024.
Unsecured debt among insolvent homeowners rose 12.6% year-over-year in 2025, adding to the strain of higher mortgage payments.
Hoyes, Michalos & Associates noted that insolvent homeowners, on average, had $111,995 in unsecured debt at the time they filed for bankruptcy.
Canada’s economy has weakened over the past year due to a slowdown in the labour market and U.S. tariffs imposed on Canadian exports.
