Post by : Mina Rahman
Increasing living costs are resulting in significant financial stress for Canadians, with nearly one-quarter taking on new debt within the past year. A recent study by the Office of the Superintendent of Bankruptcy (OSB) and the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) indicates that over half of Canadians (54%) face challenges in settling their bills. In 2024, insolvency filings reached 4.2 per 1,000 adults — the highest occurrence since 2019.
Economist Moshe Lander from Concordia University expressed concern regarding this trend, citing that many individuals are spending beyond their earnings and find it increasingly difficult to manage their financial health, especially during crucial working years.
The Canadian consumer debt soared to $673 billion in the third quarter of 2025, marking an 18% increase from the previous year, according to TransUnion. Notably, car loans significantly contributed to this rise, with average balances escalating from $29,138 to $30,396. Additionally, credit card debt increased to an average of $4,652.
Defaults on non-mortgage loans are rising among younger households and urban property owners. Experts assert that the interest rate hikes since 2022 have unveiled financial strains that were previously concealed by lower rates.
Alarmingly, nearly half of Canadians (48%) do not possess enough savings to sustain three months' worth of living expenses. Financial advisor Stacy Yanchuk Oleksy suggests initiating small, feasible steps to develop an emergency fund, like the popular 52-week savings challenge.
To navigate debt effectively, experts recommend a thorough examination of all loans alongside creating a detailed budget. Alternatives such as debt consolidation, management plans, or consumer proposals may assist individuals financially. Bankruptcy can be contemplated as a final option when other avenues prove impractical, facilitating a route to financial recovery.
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