Record numbers of Canadians are turning to personal insolvency in a bid to manage during the cost-of-living crisis, new figures have revealed.
Consumer proposals – a leading debt solution available to those struggling – have reached their highest level since 2019.
According to the latest Insolvency Statistics in Canada from the Office of the Superintendent of Bankruptcy (OSB), consumer proposals increased by 29.3% in Q1 compared to last year.
The insolvency figure from the country’s top financial regulator paints a harrowing picture of the reality faced by thousands trying to make ends meet as interest soars.
However, as the economic landscape continues to change, attitudes towards debt and debt help are too, according to debt help website Debt Relief Canada, run by A. Fisher & Associates.
The surge in consumer proposals
A Fisher and Associates, through their website Debt Relief Canada, specialize in supporting people struggling with problem debt.
One of Canada’s leading debt relief organizations, the company specializes in Consumer Proposals – a legally binding agreement between a person and their creditors.
Managed by a Licensed Insolvency Trustee (LIT), a Consumer Proposal allows an individual to negotiate a revised payment plan based on what they can afford to pay. Interest rates and other charges are frozen. What’s more, payment terms are extended and allows individuals to write off a percentage of the debt they simply can’t afford.
Speaking of the increase in Consumer Proposals, Andy Fisher LIT at A. Fisher & Associates said: “There are a number of reasons why more people are turning to Consumer Proposals. Firstly, a Consumer Proposal is an alternative to filing for bankruptcy and doesn’t have the same negative impact on credit scores, which is a positive for many.
“It’s also a flexible arrangement that allows people the opportunity to negotiate repayment terms according to their affordability.
“Then there’s an element of protection. Filing a Consumer Proposal triggers an automatic stay of proceedings, providing immediate legal protection from creditors’ collection calls, wage garnishments, or legal actions.
“This protection allows people the necessary breathing space to restructure their finances and focus on long-term financial stability.”
The importance of addressing the underlying issues
While Consumer Proposals offer a lifeline for many Canadians facing personal debt, it is crucial to recognize that they are a tool for debt management rather than a solution to the cost of living crisis itself.
As essential costs remain stubbornly high and wages remain stagnant the struggle goes beyond just dealing with debt.
“As a Licenced Insolvency Trustee, it’s my job to help people who are struggling. I help them build on their financial knowledge and empower them to make better choices in the future,” says Andy.
“But I can only do so much when the goal posts keep moving for people. We need to address the root causes of financial trouble – such increasing affordable housing and improving financial literacy - and take proactive measures where possible to support people.
“There’s no easy answer but if we stand by each other and aren’t afraid to have a few tough conversations along the way, we’ll come through the other side stronger than before.”
With almost 30 years of experience in the insolvency industry, Andy Fisher is regarded as one of Canada’s leading Licensed Insolvency Trustees. To find out more about consumer proposals and the services offered by A Fisher & Associates, visit debtreliefcanada.com
"Disclaimer" This press release may contain forward-looking statements. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.
Company: Debt Relief Canada
Contact person : A.Fisher
Address: calgary, Alberta Canada
Phone: +416 842 0040