Post by : Meena Ariff

Escalating living costs are leading many Canadians into financial difficulties, with almost one in four individuals acquiring new debt in the past year. A recent survey conducted by the Office of the Superintendent of Bankruptcy (OSB) alongside the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) revealed that more than half of Canadians (54%) are struggling to manage their bill payments. In 2024, the insolvency rate climbed to 4.2 out of every 1,000 adults, marking the highest figure since 2019.

Economist Moshe Lander from Concordia University expressed concern over this trend, noting that many individuals are spending beyond their earnings and finding it increasingly challenging to regain financial control during their peak working years.

According to TransUnion, consumer debt in Canada hit $673 billion in Q3 2025, reflecting an 18% increase compared to last year. Car loans have significantly influenced this rise, with average balances increasing from $29,138 to $30,396. Additionally, credit card debt surged to an average of $4,652.

Younger households and urban homeowners are facing heightened default rates on non-mortgage loans, with analysts indicating that rising interest rates since 2022 have revealed financial pressures that were previously hidden.

Almost half of Canadians (48%) do not have enough savings to cover three months of living expenses. Financial advisor Stacy Yanchuk Oleksy suggests that individuals should start with small, achievable steps to create an emergency fund, such as participating in the 52-week savings challenge.

To effectively manage debt, experts recommend assessing all loans and formulating a precise budget. Various options are available, including debt consolidation, management plans, or consumer proposals. Bankruptcy is considered a last resort when other avenues have been exhausted, enabling individuals to restore their financial footing.

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