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The Profile of Bankruptcy Debtor Characteristics

Bankruptcy can happen to anyone at any age when the world is challenged financially, as they have been the last several months with the Pandemic.

The OSB developed the Canadian Consumer Debtor Profile report, which contains consumer insolvency statistics. Here are the characteristics based on status, age, and asset and liabilities

Debtors identified as 53% Male and 47% as Female. The marital status of debtors was divided into four categories:

  1. 38% Married/Common-law

  2. 37% Single

  3. 22% Divorced/Separated

  4. 3% Widowed

In contrast, the marital status for the general population was 59% Married/Common-law, 26% Single, 9% Divorced/Separated, and 6% Widowed. The average debtor was 47 years old with a household size of 2.1 people.

In 2019, 22% of debtors had previously filed for bankruptcy. Of these repeat debtors, 87% had filed for only one previous bankruptcy. Only 16% of debtors lived in rural areas while 84% lived in urban areas, which is roughly the same distribution as the general population.

Age Brackets

In the OSB report, the population is into four age brackets:

Under 35 – The debtor population in this age bracket had the fewest liabilities, with a median value of $39,108. This population also had the highest frequency of student loans at 28%. Additionally, 60% of these debtors were single and only 12% owned a home.

35 – 50 – Debtors in this age bracket accumulated the most liabilities, with a median value of $61,549. This group had the highest average household income and expenses at $3,135 to $3,200. This age bracket also had the highest percentage of married/common-law debtors at 42% and the largest average household size at 2.5.

50 – 65 Debtors in this age bracket had the highest frequency of tax debt, with 41% as well as the highest median tax debt of $7,100. This group cited medical reasons 29% of the time as a reason for financial difficulty and had the highest divorce/separation rate at 28%

65+ Debtors had the highest median credit card debt, with $18,700 and the lowest median income, with $2,170 and the lowest median expenses, with $2,235.

Assets and Liabilities

The average total assets for debtors in 2019 were $12,731 and the average total liabilities were $51,904, for a net difference of $39,173. Among debtors, 65% owned a vehicle with an average value of $8,346. Only 21% of debtors owned a home with a value of $210,000 and a mortgage value of $180,923. The most frequent liability category was credit card debt. Among debtors, 88% had credit card debt with an average debt of $13,827.

Loans were another frequent liability and are divided into four categories:

  1. bank loans

  2. finance company loans

  3. student loans

  4. loans from individuals

Bank loans were the most frequent, with 56% of debtors having bank loan debt of $18,300. The second most frequent were finance company loans, with 37% of debtors having median debt of $11,109. Third were student loans, with 13% of debtors and a median debt of $10,500. The least frequent were loans from individuals, with just 2% of debtors and a median debt of $9,746. Another frequently identified liability was taxes, with 37% of debtors owing taxes with a median debt of $5,598.

At D. Thode & Associates, our Licensed Insolvency Trustees conduct an “assessment”. This is the first stage of the insolvency process which provides for a financial appraisal interview, a description of statutory and non-statutory options that are available to an individual debtor, and a discussion on the merits and consequences of those options.

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