Canadian insolvencies hit a 17-year high — here's what the rising debt trend means for your money

But it’s not the quantity of insolvency cases that’s worrisome, but the underlying trend that concerns insolvency professionals. "It's the canary in the coal mine," explained Doug Hoyes, a licensed insolvency trustee and co-founder of Hoyes, Michalos & Associates. In particular, was the sharp increase in filed insolvencies from January to March of this year, climbing 17.5% in just three short months.

For households who are just covering minimum payments while juggling ongoing living costs, this is a reminder that far more Canadians are struggling with inflation, price increases, higher living costs and economic uncertainty.

Pay off debt faster. If you’re struggling with high credit card debt or have outstanding payments on multiple cards, consider taking out a personal loan. If you use a loan consolidator, like Loans Canada, you can shop for the best rate and best loan. Personal loans typically have a lower interest rate than credit cards, which helps you save on interest payments. Plus, you only have one payment to keep track of when consolidating debt with a personal loan. Use Loans Canada to compare rates and find your one payment loan option — and pay off debt faster.

Consumer proposal or bankruptcy? What do Canadians choose?

According to OSB data, almost 80% of the 37,121 filings were consumer proposals, while the remaining 20% were bankruptcies.

As Hoyes explains, a consumer proposal prevents a person from losing assets while agreeing to repay creditors a fixed amount, over time, while bankruptcy can require giving up assets to settle debt. In general, consumer proposals tend to be chosen by people who still feel relatively stable about their financial future, while bankruptcies often signal a deeper crisis.

So, why does this matter? Because most of the filings are from Canadians who need help with debt management and repayment, not Canadians who have lost everything.

Why debt is getting heavier even where filings haven't spiked

Equifax Canada, the credit bureau that tracks national debt and repayment data, found in its Q1 2026 Market Pulse report that the average non-mortgage debt tied to an insolvency filing reached $43.3K, up from $40.2K two years earlier. For homeowners who became insolvent, average non-mortgage debt hit $82.4K, a 19% increase over the same period. In other words, the people filing aren't just more numerous — they're going in deeper before they file.

B.C. and Ontario are leading the increase

British Columbia posted the steepest year-over-year jump in consumer insolvencies, up 16.2% to 4,234 filings, OSB data shows. Ontario's consumer insolvencies rose 14.7%, with bankruptcies there climbing more than 25% — a spike Hoyes linked partly to U.S. tariffs hitting the province's manufacturing sector.

What to do before debt becomes unmanageable

You don't need a record-breaking headline to know if you're at risk. Instead, watch for these warning signs:

• Making only minimum payments on credit cards for more than a few months in a row
• Using one credit product to pay another, such as a cash advance to cover a mortgage payment
• Feeling unable to absorb a $500 unexpected expense without new borrowing

If any of that sounds familiar, a free consultation with a federally regulated Licensed Insolvency Trustee can clarify your actual options before a missed payment turns into a crisis. As Wesley Cowan, a Licensed Insolvency Trustee and vice chair of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP), put it, the goal for most people isn't choosing between a proposal and bankruptcy right away — it's understanding whether debt can still be managed informally, and what each path would mean for long-term recovery.

Cut your interest costs. Lower your total borrowing costs by rolling high-interest credit card debt into a more affordable loan. Credit cards often carry higher interest rates than personal loans, so carrying a rolling credit card balance can become costly over time. Moving debt into a single, lower-rate financing structure can help reduce your overall borrowing costs and help you get out of debt faster. Using Loans Canada, you can compare loan rates or find a consolidation loan. Loans Canada uses a single application to help you compare rates from more than a dozen lenders, finding the best rates and better terms. Make debt repayment easier and faster using Loans Canada.

Being proactive matters

The data doesn't mean a crisis is coming for every household. But it does mean the cushion many Canadians rely upon is getting thinner. For every Canadian, that means being proactive — checking your own numbers and cutting costs where possible, to help build some wiggle room, should a cash crisis arise.