Canadian Consumer Bankruptcies are on the rise

Toronto (October 26, 2008)

The number of Canadian consumers filing for bankruptcy has jumped 6.3% in July over June, according to statistics released earlier this month by the Office of the Superintendent of Bankruptcy Canada. In addition to the bankruptcies, 2,092 individuals filed proposals to reorganize their financial affairs and avoid bankruptcy during July, up 31% from the same month a year earlier.

“This is a problematic but not surprising trend,” said Jeff Schwartz, Executive Director of Consolidated Credit Counseling Services of Canada Inc., a non-profit debt management agency. Schwartz says his agency has seen a 50% increase in clients over the same period last year. “Bankruptcy can have serious negative impact on the lives of individuals that can stay with them for a long time. And it’s not just the financial implications; it can affect their employability as well.” Schwartz adds, “Bankruptcy is just one alternative, in most cases, this is avoidable, credit counselling can help consumers determine what’s best for them.”

Clients call Consolidated Credit’s number on their website to speak with a trained credit counsellor. After an in-depth counselling session to determine the gravity of their situation, clients will work with the counsellors to set up an action plan that will help them achieve their debt management goals. But the relationship doesn’t end there.

“We follow up with financial and debt management education which is crucial to ensuring that our clients can turn the corner and learn how to manage their finances in the long-term,” adds Schwartz. “There are many reasons why consumers find themselves over their heads in debt, including over-spending, job loss or divorce. Whatever the reason, people need to take that first and most important step, which is to make the decision to seek help, and we’re here to offer that help”.

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