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The superintendent of bankruptcy has added his voice to the growing chorus of warnings that Canadians are gorging on borrowed money. (iStock)
The superintendent of bankruptcy has added his voice to the growing chorus of warnings that Canadians are gorging on borrowed money. (iStock)

Bankruptcy chief warns of debt's 'harsh realities' Add to ...

The superintendent of bankruptcy has added his voice to the growing chorus of warnings that Canadians are gorging on borrowed money.

"It's important for Canadians to be aware of the risks and possible consequences of taking on a large amount of debt," James Callon, who heads the Office of the Superintendent of Bankruptcy Canada said in a statement on the agency's website Friday.

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"Significant events, such as a change in employment or income, a change in family status or a serious illness, can cause a huge drain on finances. The combination of a large amount of debt and the sudden occurrence of a major life event could lead to the harsh realities of insolvency."

Mr. Callon is the latest among several policy makers and economists who have warned that debt levels are getting out of hand. Most notably, Bank of Canada Governor Mark Carney has been issuing such warnings for months.

Mr. Callon noted that the number of insolvencies filed during October, the latest month for statistics, may have been down from a month earlier, but the number of consumer insolvencies remains 22.5 per cent above the pre-recession level.

The ratio of household debt-to-disposable income is now at a record high of 148.1 per cent, topping that in the United States.

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