Ontario Bankruptcy Statistics

How many people declare bankruptcy in Ontario? How many file consumer proposals?  What are the trends?

For the twelve months ended June 30, 2011 there were a total of 53,718 filings in Ontario.  That was made up of 28,753 personal bankruptcies, and 24,965 consumer proposals.

In the year ended June 30, 2010 there were 40,384 bankruptcies and 22,345 proposals, for a total of 62,729 personal insolvencies.

These numbers present an interesting split: bankruptcy filings are down by 28.8%, but consumer proposal filings are up by 11.7%.

These results are similar to the bankruptcy Canada statistics, which show a decrease of 19.1% in bankruptcies and and increase of 10.7% in consumer proposals over the same period.

So why are bankruptcies falling, but consumer proposals are increasing?

One reason has to do with the surplus income and bankruptcy trap.  In bankruptcy, the more you make, the more you are required to pay, so if you expect your income to increase, a consumer proposal may be a better option for you.

Also, for many residents of Ontario, they prefer to negotiate a settlement with their creditors, instead of simply going bankrupt.

Regardless, it will be interesting to watch how the trends develop.  If the economy in Ontario starts to falter, it’s possible that the number of bankruptcy filings will begin to increase again.