Thursday, May 30, 2024

Quebec, a personal bankruptcy champion in Canada

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Alan Binder
Alan Binder
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Unfortunately Quebec is the champion of personal bankruptcies in Canada, even though 2020 has been an exceptional year.

In the past year there has been a historic drop in the number of insolvency cases. Mainly thanks to the help of banks and governments, many Quebecers averted a financial meltdown.

But at the start of the year, we could see an increase in the number of bankruptcies and consumer offerings.

In January in Quebec there were 857 personal bankruptcies, which is a 4% increase in insolvencies.

In Canada, there were 2,257 personal bankruptcies for the same month, a decrease of 4%.

Is Quebec heading towards a significant increase in bankruptcies in the coming months? It’s hard to predict, says Eric Leble, Partner and Licensed Insolvency Secretary at Raymond Chabot.

We have seen a slight increase for two months. We are at roughly 55% of the 2019 volume, he said. Will this decline continue? We think so in the short term.

According to him, as long as financial assistance will be available from both sides, the number of bankruptcies is expected to remain somewhat low.

However, he does not rule out a return to the 2019 numbers given the Canadians’ debt ratio.

One thing is for sure, that applicants’ file changes little. The majority of clients are between the ages of 35 and 55, says Mr. Leble.

“You know, this is where we face most of the financial burden,” he explains.

Job loss, illness, and separation remain major reasons for a taxpayer to file for bankruptcy.

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