Debt Reality in Canada: Consumer Debtor Profile

For the purpose of this discussion, a "debtor" is someone who has made a formal insolvency filing, such as a bankruptcy or a Consumer Proposal. Anyone who works in the field of insolvency knows that the profile of a debtor doesn’t fit one stereotype. However, the 2024 Canadian Consumer Debtor Profile provides some interesting summarized information about debtors:

• They are 46 years old on average, though the range is large.
• Gender is in line with the ratio of the general population – 36% didn’t report their gender, but of those who did, 28% are male, 27% female, and 9% say Other.
• The average household size is two people, but again there is a range.
• Most are Urban-dwelling (88%), which is in line with the ratio of the general population.
• They are often renters (only 14% owning a home—down from 16% in 2021).
• They are more likely to be single (37% are married or common-law, compared to 56% of the general population).
• 20% have previously filed for bankruptcy at least once before.

The data regarding marital status is particularly interesting. The fact that a higher proportion of single people are making an insolvency filing compared to the general population suggests that things like social support, shared costs, and dual incomes do help reduce financial stress.

Income Versus Expenses: A Growing Gap

One of the most revealing insights from the profile relates to income and expenses.

The median monthly household income for debtors was $3,089, while the median household expenses were higher at $3,264—meaning the average insolvent household is $175 short each month before even paying any debt obligations.

By comparison, according to Statistics Canada the median monthly household income for all Canadians was approximately $7,050 in 2023. This gap suggests that low income is a factor in the insolvency of debtors. In fact, it would appear that the finances of insolvent households are severely strained.

Another interesting insight is how fast expenses are rising. The report indicates the following:

• The median reported living expenses of debtors is up 21% since 2021.
• The median reported transportation expenses of debtors is up 33% over the same period.

These aren’t discretionary costs. Expenses included here are groceries, utilities, transit, car costs, and housing—essential expenses that families can’t easily cut without affecting their quality of life.

Assets and Liabilities: A Stark Imbalance

When we look at the typical debtor’s net worth, the numbers reported in 2024 were:

• Median assets: $15,142
• Median liabilities: $53,997
• Net deficit: $38,855

Contrast this with the median Canadian household—estimated assets around $680,000 and debts around $100,000, giving a net worth of over $500,000 -- and it’s obvious there’s a huge disparity between the typical insolvent household and financially solvent Canadians. So if it feels like there is a lot of economic disparity in Canada, this seems to support that.

The Canadian Consumer Debtor Profile captures the self-reported reasons people struggled financially, which shows that the reasons can vary:

• Loss of income (which in our experience includes job loss, reduced hours, and unpredictable seasonal work patterns): 45%
• Medical issues (which in our experience include both temporary illness or injury and long term disability situations): 20%
• Relationship breakdown (which in our experience involve the cost of divorce, loss of household financial support, and increased child-related expenses): 11%
• Support of others (which in our experience includes sick spouses, struggling adult children, and aging family members): 7%
• Business failure (which in our experience involves significant personal investment while trying to save the business, along with personal liability for debts incurred by the business): 6%

This clearly shows how life events impact a person’s financial stability. In our experience, debtors often experience more than one of the above life situations before filing an insolvency, so that even if they had a safety net it often isn’t enough.

At Charla Smith & Company, we know that insolvency statistics aren’t just numbers—they reflect the experiences of real Canadians confronting financial stress without enough safety net to withstand life events.

Structurally economic challenges like income gaps and rising costs contribute to the experiences of debtors. Economic policies and early financial literacy may help prevent some of these issues, but in the meantime many Canadians just need a plan to deal with their stressful financial situation.

If you’d like help making sense of your financial situation, or want personalized guidance on managing debt, we’re here to help. 

Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee, serving the Alberta region. We regularly help individuals consider their options when they are dealing with overwhelming debt. If you'd like to explore options for your debt, please reach out to us.

Disclaimer: This publication provides general information and should be seen as broad guidance only. The information contained herein cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon this information without obtaining specific professional advice relating to your particular circumstances. Charla Smith & Company Ltd. does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.