Canadian Consumer Insolvencies Just Saw The 2nd Biggest Month Ever
Canadian households are struggling to carry some of the biggest debt loads in the world. Office of the Superintendent of Bankruptcy (OSB) data shows consumer insolvencies just had the second-biggest August on record. The move wasn’t exactly surprising and builds on a trend that’s seen consumer insolvency filings rise to a level not seen outside of recession.
Canadian Consumer Insolvency Filings Surge Ahead of Recession
Consumers are suddenly in a rush to seek formal debt relief. A whopping 134,466 consumer insolvencies were filed in the 12-month period ending in August. This represents a 16.0% increase when compared to the same month last year, and the biggest annualized volume since March 2020. Not a great month to match but also a commonly misunderstood comparison period.
Most people recall that March 2020 was a bad month for the global economy. As the first month of a global pandemic, it wasn’t the best environment to be a highly indebted household. However, the above data is for the 12-month period ending in March 2020, and it highlights a very different issue.
Households are under more pressure with higher rates, but they were also getting crushed back in 2019. Back then it was widely expected, and there was no shortage of global warnings about the country’s highly indebted borrowers. A stop-gap in 2020 delayed insolvencies, but didn’t necessarily fix them. The market is largely picking up where it left off, this time with more programs to carry even larger loads of debt for those who like a little risk. …[Continue Reading]