Report: Consumer insolvencies saw substantial growth during Q1

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“Consumer insolvencies in Canada are continuing a sharp upward trajectory towards levels seen pre-pandemic,” said André Bolduc, licensed insolvency trustee and vice chair of CAIRP. “With rising debt carrying costs and inflation, consumer insolvencies could rise beyond pre-pandemic averages later this year.”

The majority of the insolvency filings in Q1 came from Ontario (10,299), Quebec (7,685), and Alberta (4,499), while the largest proportional increases were registered in Nova Scotia (45%), Manitoba (44.6%), and Ontario (31.8%).

Most consumer insolvency filings during the first quarter were proposals (78.9%, up from 74.2% in Q1 2022), CAIRP said.

Bolduc warned that any increases in the unemployment rate, taking the potential of a 2023 recession into account, could trigger a further surge in consumer insolvencies.

“With debt levels on the rise alongside interest rates, more individuals may turn to insolvency options as it becomes increasingly difficult to manage their debt obligations in the higher rate environment,” Bolduc said.

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