Consumer Insolvency Rate In Hamilton-Niagara Peninsula Region Remains Stable

BURLINGTON, ON – The consumer insolvency rate in the Hamilton-Niagara Peninsula region — including Burlington — remains stable, according to the Office of the Superintendent of Bankruptcy’s most recent annual report. The number of consumer insolvencies per thousand residents in the area, aged 18 years or above, remained at 3.3 in 2018.

View of Burlington Bridge from the riverbank

Despite this, a recent survey conducted by Ipsos on behalf of MNP LTD underscores the consumer debt challenges in Ontario. It found almost three-quarters (72%) of Ontarians say they owe more than $1,000, and four in ten (39%) say they don’t have enough cash on hand to pay their debts as they become due. Three in ten (28%) admit to not making all their debt payments on time and say they owe more than they’re worth (32%).

“Consumer insolvency rates in the Hamilton-Niagara Peninsula region remain stable for the moment, but many are still struggling with debt and close to the edge — which leaves them vulnerable to unexpected expenses. One of the biggest issues is people don’t have a budget that includes an emergency savings plan.  So, when something happens like an increase in interest expenses or a car repair, it could put even more strain on their finances,” says David Gowling, a debt expert and Licensed Insolvency Trustee with MNP LTD.

With many Ontarians experiencing tightening monthly budgets, it’s little surprise that just over a third are confident in their ability to manage financially if faced with an unexpected expense. Ontarians aren’t confident in their ability to cope with unexpected auto repairs or purchases (26%), having an illness and being unable to work for three months (28%), loss of employment (31%), paying for their own or someone else’s education (37%), a change in relationship status like a divorce or separation (26%) or the death of an immediate family member (33%).

“Those who are severely indebted are often unable to make any real progress to reduce their principal debt and, if they encounter any unexpected expenses, find their debt snowballing even further,” says Gowling. “For these people, seeking out debt relief options is the only way to start regaining control over their finances.”

Consumer Proposals and Bankruptcies both put a freeze on creditors and allow someone to eventually get out of debt while paying only a portion of what they owe. But there are differences in the two scenarios. Primarily that, under a Consumer Proposal, the amount repaid can typically be negotiated with creditors, whereas Bankruptcies may require one to sell assets and / or make legislatively-directed payments. 

Licensed Insolvency Trustees are the only federally regulated professionals who can provide regulated insolvency options, such as Consumer Proposals and Bankruptcies. They have extensive knowledge of governing legislation and are empowered by the federal government to help debtors make the most informed choices to deal with their debt. 

“Getting out of debt is possible — even if you have no income or assets. But the longer people wait to seek help, the worse the situation. The first step for anyone struggling financially is to seek advice from a professional,” advises Gowling.

About MNP LTD

MNP LTD, a division of the national accounting firm MNP LLP, is the largest insolvency practice in Canada. For more than 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working with individuals to help them recover from times of financial distress and regain control of their finances. With more than 230 offices from coast-to-coast, MNP helps thousands of Canadians who are struggling with an overwhelming amount of debt each year. Visit MNPdebt.ca to contact a Licensed Insolvency Trustee or get a free checkup for your debt health using the MNP Debt Scale.

MNP LTD is the creator of the MNP Consumer Debt Index, an industry-leading national barometer of financial pressure among Canadians. Conducted by Ipsos and updated quarterly, the Index measures Canadians’ attitudes toward their consumer debt and gauges their ability to pay their bills, endure unexpected expenses, follow a budget and absorb interest rate fluctuations without approaching insolvency. The next MNP Consumer Debt Index is set to be released in July 2019.

About the Survey

The survey was compiled by Ipsos on behalf of MNP LTD between March 13 and March 24, 2019. For this survey, a sample of 2,070 was interviewed online. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadians been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error.