Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Consumer bankruptcies decreased by 4.1 per cent, while consumer proposals rose by 4.8 per cent in the 12-month period.

Getty Images/iStockphoto

Consumers continue to opt in large numbers for renegotiating their debt rather than declaring bankruptcy, according to the latest statistics.

For the 12 months ending Jan. 31, total consumer insolvencies – which includes bankruptcies and proposals in which a negotiated deal with creditors is struck – decreased by 0.5 per cent compared with the 12-month period ending Jan. 31, 2013, says the Office of the Superintendent of Bankruptcy Canada.

But consumer bankruptcies decreased by 4.1 per cent, while consumer proposals rose by 4.8 per cent in the 12-month period.

Story continues below advertisement

"What that tells me is that we are probably within a month or two or three of being at the bottom of the trough," said Douglas Hoyes, a Kitchener, Ont.-based bankruptcy trustee with Hoyes Michalos & Associates Inc.

"It's a positive development," he said.

The proportion of proposals increased to 41.9 per cent during the 12-month period ending Jan. 31, up from 39.8 per cent during the previous 12-month period.

"My prediction is that over time the number of proposals filed will continue to increase and we will get closer to 50/50," said Mr. Hoyes.

One of the key reasons for the rise in consumer proposals is that personal bankruptcies became more expensive when the federal government brought in changes to the law in 2009, he said.

The number of consumer proposals in 2006 stood at about 15 per cent.

Under the terms of a consumer proposal, an individual negotiates – with a bankruptcy trustee – to repay creditors part of his or her debt for a fixed period of time, or else the time given to pay off the debt is extended.

Story continues below advertisement

Other figures released Monday by the bankruptcy superintendent indicate that the total number of insolvencies in January was 5.4 per cent lower than in the year-earlier period. Consumer insolvencies decreased by 5.6 per cent, while business insolvencies increased by 1.3 per cent.

For the 12-month period ending Jan. 31, 96.5 per cent of total insolvencies were filed by consumers.

Mr. Hoyes cautions that bankruptcy filings may begin to rise again this year.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies