Canadians squeezed by rising debt, dependants

The average bankrupt Canadian is getting older and has a growing level of debt, says a recent study.

“We reviewed approximately 7,000 personal insolvency filings from 2011 and 2012, and discovered the typical insolvent person is a 43-year-old male with more than $61,000 in unsecured debt,” said Douglas Hoyes, a trustee with Hoyes, Michalos & Associates.

Remarkably, the highest debt levels occur in the 50-to-59-year-old age group. These debts exceed $84,000. “The most at-risk group is pre-retirement debtors,” cautions Ted Michalos, also a trustee at Hoyes, Michalos & Associates.

The average 50-to-59-year-old is working but is earning less than those aged 40-to-49. One in three of the older group still supports at least one dependant. If they own a home, they still have a substantial mortgage.

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“They are squeezed from all sides,” says Douglas Hoyes. “They are often supporting both older children and aging parents, as well as making debt payments. They may also be dealing with medical expenses for themselves or family members.”

He adds, “They’re using credit to make ends meet,” meaning they often have no alternative but to file a consumer proposal or personal bankruptcy.

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Both men say many “Canadians are in denial about their overall debt load. [But] talking to a reputable professional is the first step in eliminating overwhelming debt problems.”