Toronto (with files from MNP) – The number of Canadians who filed for insolvency in the first quarter of 2019 was up six per cent compared to the same quarter of last year, according to the latest official figures, providing more evidence of the mounting strain on many households. The Office of the Superintendent of Bankruptcy (OSB) said for the twelve month period ending March 31st, 2019, about 127,108 Canadians became insolvent.
Grant Bazian, President of the country’s largest insolvency firm, MNP LTD, cautions that the OSB data does not likely reflect the whole story. He says many Canadians who are unable to pay their bills and are having significant financial challenges have not yet sought out help or professional advice.
“Filing for bankruptcy can be seen as an admission of personal and financial failure. This shame and guilt causes many people to sweat it out for years before reckoning with their debt,” says Bazian.
The time before a person files a consumer proposal or bankruptcy has been referred to as the ‘financial sweatbox’. That’s the period when people are facing serious financial hardship, sometimes enduring aggressive calls from debt collection agencies, wage garnishment, and even forgoing basic necessities to avoid filing a consumer proposal or bankruptcy.
“Based on our research since 2016, we know there are many Canadians experiencing this kind of financial distress. This isn’t good news but it’s something that needs to be discussed so we can eliminate the stigma associated with asking for help and – if it is the best course of action – filing a proposal or bankruptcy,” he says.