Is Bankruptcy in Canada Caused By Not Worrying About High Debt?

Category: Bankruptcy News

Special guest commentary by Douglas Hoyes, CA, Bankruptcy Canada Trustee

I am a bankruptcy trustee in Ontario, Canada, and many times each week when I talk to people on the phone and ask them how much they owe, they underestimate their total debt.  It’s only when they pull out all of their bills and add them up do they fully realize how deep in debt they are.

I wanted to explore this further, so I hired Harris Decima, the big research and polling firm, to do a survey.  They interviewed over 1,000 Canadians, and the results are in: we have a lot of debt, but we are not worried about it.

How is that possible?  The average Canadian adult has more debt as a percentage of income than at any time in history, and yet when we asked if they are confident about being able to pay the bills, they said “yes we are”.

Question:“You are confident in your ability to meet your monthly financial obligations”


  • 81% Agree
  • 10% Neither Agree nor Disagree
  • 9% Disagree

Then we asked another question:

Question: “How confident are you that you could come up with $2,000 if an unexpected need were to arise in the next month?””


  • 40% Extremely confident
  • 15% Very confident
  • 17% Somewhat confident
  • 14% Not very confident
  • 14% Not at all confident

While most Canadians are confident they could raise $2,000 in the event of a financial emergency, there are a large number of Canadians who could not raise the money, regardless of how much time they were given.

We probed further, and asked “how would you come up with the money”, and 92% of Canadians listed some form of borrowing, including using a line of credit, a credit card, or borrowing from friends and family.

That’s what I call a “disjoint”: we have a lot of debt, but we aren’t worried about.  In fact, in the event of an emergency, we assume that we can create more debt to get us out of trouble.  That’s a bad assumption, because obviously it is high debt levels that lead to bankruptcy in Canada.

If you have a lot of debt, don’t become a statistic; contact a bankruptcy Canada trustee to review your options, and make a plan to eliminate your debt.

Category: Bankruptcy News |

About J. Douglas Hoyes

Douglas Hoyes, BA, CA, CPA, CBV, CIRP is a Licensed Insolvency Trustee and the co-founder of Hoyes, Michalos & Associates Inc., one of Canada's largest independent personal insolvency firms.