Insolvencies in Canada continue to rise and are now at their highest level since the 2008/09 financial crisis.
The Office of the Superintendent of Bankruptcies released data that shows more than 13,000 insolvencies were filed in June of this year, up 11.5% from a year earlier.
Insolvency is a financial state where a person cannot meet their debt payments. Bankruptcy is a legal process that happens when an individual or business declares they cannot pay creditors.
The bankruptcy process in court is often used to help people and businesses restructure their debts and get on a sustainable repayment program.
The majority of insolvencies filed in Canada during June were from consumers.
Analysts say that high household debt levels and stagnating purchasing power have put pressure on Canadians’ finances since the Covid-19 pandemic struck in 2020.
Insolvency rates in Canada are now at levels last seen in 2009 amidst the fallout from the global financial crisis.
Canadian consumers have an average of $22,000 in non-mortgage debt, which is comprised largely of car loans, lines of credit, and credit cards.
