Consumer insolvencies surged to a 16-year high, with stigma keeping many Canadians silent
Canadian consumer insolvencies climbed to their highest level since the global financial crisis, with new data from the Office of the Superintendent of Bankruptcy (OSB) showing a 4.8% year-over-year rise in Q3 2025 filings.
The 36,256 filings recorded in the third quarter marked the third-highest quarterly volume since 1987, and the highest since 2009, according to the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
“Behind these numbers are Canadians who continue to struggle to balance daily expenses with mounting debt obligations. For many, consumer insolvency filings are the result of financial pressures that have been building quietly for some time,” said Wesley Cowan, licensed insolvency trustee and vice chair of CAIRP.
Debt stigma and silent suffering
The data revealed that consumer insolvencies were not only up 4.8% year-over-year but also 3.3% higher than the previous quarter.
Compared to pre-pandemic norms, Q3 filings were 17.1% above the five-year average and 29.4% higher than the recent four-year average.
In the 12 months ending September 30, 2025, Canadians filed 139,335 consumer insolvencies—a 2.9% increase over the previous year. Still, experts warned these figures may understate the true scope of financial distress.
“People often wait until they feel completely overwhelmed before seeking help,” Cowan said.
“But opening up about debt earlier—even just having that first conversation—can make a world of difference. Financial Literacy Month is about encouraging those conversations and showing Canadians that help is available. Licensed Insolvency Trustees offer a trusted, confidential place to talk through your options and find a way forward.”
Business insolvencies down, but risks remain
While consumer insolvencies surged, business filings dropped 15.5% year-over-year in Q3 to 1,108.
Over the past 12 months, business insolvencies fell 20.8% compared to the previous year.
Munro cautioned that the decline may not signal improved business health: “Some owners may be delaying filings by juggling debt or negotiating informally with creditors. Others simply wind down operations without entering the insolvency system, which means their financial challenges aren’t reflected in the official numbers. Stigma can also play a role.”
Cracks in household credit and looming mortgage risks
While Canada’s household credit landscape has appeared stable, cracks are beginning to show. A recent CIBC Capital Markets report warned that, although overall insolvency rates have levelled off at pre-pandemic levels, the numbers hide a significant shift beneath the surface.
Many households are quietly struggling, and with a wave of mortgage renewals expected in 2026, more Canadians could soon face even greater financial pressure.
“The relative stability in the insolvency trajectory has been masking a significant substitution between rising proposals and falling bankruptcies,” economist Benjamin Tal, said.
Regional disparities and the call for open conversations
Ontario and Quebec led the country in filings, with 13,893 and 8,898 respectively.
British Columbia saw the sharpest year-over-year increase at 19.4%, while Prince Edward Island and Newfoundland and Labrador also posted double-digit gains.
CAIRP chair Craig Munro highlighted the importance of early intervention: “Financial challenges can affect anyone, regardless of income or background. The key is understanding your situation and knowing where to turn for help. Licensed Insolvency Trustees are federally regulated professionals who can explain every debt relief option, so Canadians can make informed and confident decisions about their financial future,” Munro said.
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