There’s growing concern that more households are carrying too much debt and struggling to pay their bills, leading to more consumer proposals and bankruptcies.
More Canadians filed for insolvency in the first three months of this year than in any other quarter since the global financial crisis in 2009.
According to the Office of the Superintendent of Bankruptcy, 37,121 Canadians either filed a consumer proposal or declared bankruptcy during the first three months of this year.
That’s an increase of 8.5 per cent over the same period in 2025.
“I’m not surprised by these numbers. We know that half of Canadian households are living paycheque to paycheque, which means they have no savings and when something happens, they have to rely on credit,” said Andre Bolduc, a licensed insolvency trustee and past chair of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
He said that Canadians are carrying record levels of debt, among the highest in G7 countries.
With many mortgages coming due this year, many homeowners will have to remortgage at rates significantly higher than they were five years ago.
Combined with inflation, rising food and gas prices, many Canadians are feeling the financial squeeze.
Bolduc said that insolvency proposals make up both bankruptcies and consumer proposals, but he says generally speaking, 80 per cent of clients will choose a consumer proposal over declaring bankruptcy.
Moving forward with a consumer proposal allows a client to have a fixed monthly payment, stop interest from accumulating and usually not result in losing their assets.
“Most of the time (with a consumer proposal), they will pay less than what they owe. It’s based on their budget and capacity to pay,” said Bolduc.
Ontario had consumer insolvency filings of 13,913, which is an increase of 14.7 per cent over the year before.
Doug Hoyes, a licensed insolvency trustee with Hoyes, Michalos & Associates Inc., said some of the issues with the trade dispute with the United States are affecting the Ontario economy.
“The number of increases in insolvencies is a lot worse in Ontario than the rest of Canada because we are the engine of the economy,” said Hoyes.
Hoyes is concerned that, with tariffs and rising unemployment, things may get worse before they get better.
“I suspect we will see a continued, but perhaps gradual increase in the number of personal insolvencies in Ontario for many months to come,” said Hoyes.
Hoyes recommends keeping debt levels low and curbing your expenses.
Anyone facing financial hardship can seek advice from a licensed insolvency trustee, and there is usually no charge for the first meeting.
Bolduc said that often, people who meet with a trustee may not move ahead with a consumer proposal or a bankruptcy. They just may get advice on budgeting and having their finances assessed by a professional.
Another issue adding to household budgets is the rising cost of car ownership. Insurance, maintenance, and fuel are expensive, but vehicles also cost more now.
Many people now take out loans for six to seven years, meaning they may be trading in a vehicle before it’s paid for, which could cost them $10,000 to $20,000 when they need to replace it.
