CAIRP: Consumer Insolvencies in Canada up 9.5% in the Last 12 Months

Canadians urged to beware of unregulated, unlicensed debt advisors that claim to be authorized to assist with insolvency options. Those facing personal financial struggles are urged to seek debt help from government-regulated, licensed professionals to av
September 22, 2023

TORONTO – January 5, 2023 – Consumer insolvency filings in Canada have increased 9.5% over the last 12 months, according to the latest statistics released by the Office of the Superintendent of Bankruptcy, rising from 90,657 filings in the 12-month period ended November 30, 2021 to 99,281 filings in the 12-month period ended November 30, 2022. As Canadians grapple with incoming holiday bills on top of the ballooning costs of everyday expenses, the Canadian Association of Insolvency and Restructuring Professionals (CAIRP), the national voice on insolvency matters in Canada, is reminding Canadians experiencing personal financial struggles to speak with government-regulated licensed professionals, as some unregulated debt advisory firms have been observed misrepresenting the services they offer and misleading insolvent individuals to pay unnecessary fees for debt-relief.

“Financially distressed consumers may be targeted by those who falsely claim to be able to slash their debt, which is why it is critical they seek debt advice from reputable professionals,” cautions André Bolduc, Licensed Insolvency Trustee and Vice-Chair of CAIRP. “Many households overextend themselves on holiday spending, and this year, inflation could very well amplify the consequences of that spending, tipping them into the red. The number of individuals seeking debt help early in the New Year may increase as holiday bills catch up with them. We need to ensure that they receive advice from qualified professionals.”

In an effort to help Canadians find advice and solutions they can trust to help with their debt, The Office of the Superintendent of Bankruptcy (OSB) and the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) are reminding Canadians to beware of unregulated, unlicensed debt advisors that claim to be authorized to assist with insolvency options. Some charge hundreds or even thousands of dollars for services they are not licensed to provide, or for unnecessary services offered before, during or after a consumer proposal or bankruptcy filing.

In November 2022 alone, ahead of the holiday season, 9,423 Canadians filed a consumer proposal or bankruptcy, an increase of 16.3% compared to the same month in 2021. Consumer insolvencies have increased 6.9% compared to the previous month, October 2022.

As the only debt-relief professionals who are legally and ethically bound to provide accurate, unbiased advice, Bolduc encourages anyone experiencing financial difficulties to meet first with a Licensed Insolvency Trustee (LIT) in order to understand all of their debt-relief options.

“Due to their extensive specialized training, Licensed Insolvency Trustees are the most qualified, educated debt-relief professionals in Canada. Individuals can feel confident that the advice they receive from a LIT is unbiased and will help them make informed decisions concerning all of their debt solution options,” says Jean-Daniel Breton, Chair of CAIRP. “Licensed Insolvency Trustees are also the only debt professionals authorized to administer government-regulated insolvency options.”

Bolduc says there are several signs Canadians should be on the lookout for that could point to financial distress and the need for professional debt help. He urges anyone who recognizes one or more of these signs to seek the help of a Licensed Insolvency Trustee who can evaluate an individual’s financial situation and recommend next steps.

8 Signs You May Be in Financial Trouble and Need Professional Debt Help

  1. You’ve missed one or more bill payments. Missed bill payments can trigger high interest charges on your credit card, which can make it even harder to pay off your balance.
  2. Creditors are calling. If you are unable to make your debt payments, you may begin receiving harassing calls from creditors who are calling to collect money you owe, which can cause stress and anxiety.
  3. You’re living on credit. If you are using credit to pay your debts and bills because your income isn’t able to cover them, this is a red flag, in particular, if credit becomes difficult to obtain and you are turning to more and more expensive credit sources.
  4. Your financial struggles are affecting your personal life. Your relationships may become strained from borrowing money from family or friends. Or your mental health is being affected due to the stress, anxiety and depression caused by the struggle to keep up with your bill payments.
  5. You’re living paycheque-to-paycheque. If you find you have no money left over by the time you reach your next payday, any small change to your income or expenses could mean you are unable to pay your bills and debt obligations.
  6. You’re only paying the minimum payment on bills. Paying only the minimum payment means it will take longer to pay off the debt because your payment is mainly going toward paying the interest. This can cause you to get stuck in a debt repayment cycle, as you are unable to make meaningful progress to pay off the debt.
  7. You’re depleting your savings to get by. While some savings, like an emergency fund, are there to help pay for the odd unexpected expense, if you are depleting your savings by repeatedly dipping in to cover your everyday bills, your finances could be in trouble.
  8. You don’t have a budget. Without a budget in place, your financial security could be at risk. A budget not only helps you plan out your spending based on your income and monthly expenses, but also helps you to save both for future expenses you are expecting as well as the ones you don’t expect – like a car repair. Not having a budget could result in having to take on debt, or piling on more debt, to manage any surprise bills or overspending.

While professional help is readily available, feelings of anxiety, fear and guilt often keep individuals from seeking help with their debt in the early stages, allowing the debt burden to continue to grow over time. Licensed Insolvency Trustees are the only professionals who are authorized to administer consumer proposals and bankruptcies, and the solutions they offer can also stop or prevent collection calls and wage garnishments, as well as offer legal protection from creditor actions.

“Some mistakenly believe bankruptcy is their only option. In reality, there are non-insolvency options that can help an individual avoid bankruptcy. For example, a Licensed Insolvency Trustee may recommend that an individual consolidate their debts, speak with their creditors, or create a budget or Debt Management Plan (DMP),” says Breton. “Or they may recommend a consumer proposal. Only Licensed Insolvency Trustees can provide options such as a consumer proposal which is a negotiated agreement to pay creditors less than what is owed to them, or extend the time to pay off the debts, or both.”

Most Licensed Insolvency Trustees offer free consultations, with no commitment and no upfront fees, to help consumers facing debt problems receive advice. Both CAIRP and the OSB maintain a directory of LITs and LIT firms, and LIT services are available across the country, even in remote locations. 


Beware of unregulated, unlicensed debt advisors: Unregulated, unlicensed debt advisors may claim to be authorized to assist with insolvency options. Some charge hundreds or even thousands of dollars for services they are not licensed to provide, or for unnecessary services offered before, during or after a consumer proposal or bankruptcy filing.


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