Bankruptcy affects Canadians from all walks of life –all ages, all income brackets, married or single, working, retired or unemployed. Are you one of the many types of debtors in Canada?

1. Debtor Profiles
Who is at risk and why?
www.hoyes.com

2. Table of Contents
The Face of Bankruptcy
The Young Debtor
The Family Debtor
The Pre-Retirement Debtor
The Senior Debtor
The Student Debtor
The Self-Employed Debtor
The Female Debtor
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8
11
14
22
2
5
25
18

3. Bankruptcy affects
Canadians from all
walks of life –all ages,
all income brackets,
married or single,
working, retired or
unemployed.
3
The Face of Bankruptcy

4. The Face of Bankruptcy
4
Our analysis reveals several “at
risk” groups:
• Young Debtors
• Family Debtors
• Pre-Retirement Debtors
• Senior Debtors
• Student Debtors
• Self-Employed Debtors
• Female Debtor vs. Male Debtor
10%
18%
30% 30%
12%
0%
5%
10%
15%
20%
25%
30%
35%
60+ 50-59 40-49 30-39 18-29
Bankruptcies By Age Group

5. The Young Debtor
Vital Statistics
Young debtors are single and equally
likely to be female or male.
They are mostly working and only 10%
are unemployed.
The average Young Debtor owes
$32,686 in unsecured debt.
They have the lowest average debt,
but also the lowest income.
5

6. 6
The Young Debtor
Why They are in Financial Trouble
Second only to Senior Debtors, Young Debtors were most likely
to mention poor financial management, followed by income
reduction as the cause of their bankruptcy.
With a below-average take-home pay, after paying their
expenses, the Young Debtor does not have enough leftover to
repay debts.
One in three Young Debtors has a dependent to support and
12% are single parents.

7. Young Debtors are most likely to
file bankruptcy over a consumer
proposal, because their income
level may not be sufficient to
support a long term proposal to
creditors.
7
The Young Debtor

8. 8
The Family Debtor
Vital Statistics
The Family Debtor is between the ages
of 30 and 49.
In their 30s, 33% are single. By their
40s, only 18% are single. More than half
have a dependent.
At this stage, 1 in 3 will purchase a
home and see dramatic increases in
credit card use to cover home and
living expenses.

9. By their 40s, the Family Debtor’s credit card
debts will have ballooned to $26,849 and
unsecured debts will have reached over $67,000.
The added stress of repaying such a large debt
puts strain on the Family Debtor’s marriage and
more than 1 in 3 will be divorced or separated
by their 40s.
9
The Family Debtor

10. Due to their income and assets
(1/3 are homeowners) the
Family debtor is more likely to
file a consumer proposal to
deal with debts than to file for
bankruptcy.
Over 58% of Family Debtors
filed a consumer proposal to
eliminate debts.
10
The Family Debtor

11. Although the majority of debtors
in this age group are still
working, their income falls below
that of debtors aged 40-49.
Pre-retirement Debtors are more
likely to list job or health reasons
as the primary cause of their
bankruptcy.
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The Pre-retirement Debtor

12. Bankrupt debtors aged 50-59 have the largest unsecured
debt of all age groups, at an astounding $84,199!
12
The Pre-retirement Debtor
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
18-29 30-39 40-49 50-59 60+
Average Unsecured Debt by Age Group
The most at risk group in our study!

13. 30% of Pre-retirement Debtors still have a dependent
at home.
• A dependent parent
• An adult child retuning home or still in school
• A younger child
• A grandchild
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The increased financial cost of supporting dependents can lead to
the use of credit cards to meet daily needs.
The Pre-retirement Debtor

14. Senior Debtors account for
10% of all insolvency filings,
and owe approximately
$68,776 in unsecured debt.
This is the second highest
amount of debt among all
age groups.
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The Senior Debtor

15. At approximately 5 credit cards per debtor, Senior Debtors often rely on credit
cards to pay for daily living expenses.
15
The Senior Debtor
At an average of
$37,161, Senior
Debtor’s credit card
debt is the highest
among all age
groups.

16. 16
The Senior Debtor
50% of Senior
Debtors are trying
to maintain debt
payments on a
single income.
Senior Debtors
have a high
likelihood of citing
illness, injury, and
health related
problems as a
cause of their
financial
difficulties.
Only 56% of Senior
Debtors had RRSP
savings and the
average total
RRSP value was
only $19,464.

17. 17
The Senior Debtor
Combine a high level of
debt with a reduction in
income or unexpected
expenses due to illness or
retirement, and the need
to file for bankruptcy
quickly becomes a reality.

18. 18
The Student Debtor
Vital Statistics
• 57% Female, 43% Male
• Between 30 and 39
• Single
• High likelihood of being a
single parent
• With an unsecured debt
of $50,791, of which
$13,252 is student loans

19. 19
The Student Debtor
The average student
leaves school with
an estimated
$28,000 in debt and
will take 14 years to
pay it back.

20. 20
The Student Debtor
This is due to:
• Lower interest rates
• More older students than
younger
• Changes to the Bankruptcy
and Insolvency act that
reduced the period of
automatic discharge from
10 years to 7. $-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
18-29 30-39 40-49
Debt Amount
Past debt amount
The average student loan has declined in recent years.

21. 21
The Student Debtor
• Female
• 36 years of age
• Single
• With an average unsecured
debt of $50,791, of which
$13,252 is student loans.
Those declaring insolvency with student loan
debt are more likely to be:

22. 22
The Self-Employed Debtor
On average, approximately
99,000 new small
businesses are created
each year, and just as many
exit the market (through
failures or closures).

23. 23
The Self-Employed Debtor
• Bankruptcies for Self-Employed Debtors rose from 9.6% to
10.0% in the last year.
• Debtors listing business failure as their reason for insolvency
increased from 4.3% to 4.7%
• Insolvent Self-Employed Debtors have an average unsecured
debt of $87,253 –the largest of all risk groups.

24. 24
The Self-Employed Debtor
• A significant part of this debt
includes tax debts for unpaid
income tax, HST and other
business related taxes. 61%
had tax debts compared to only
38% for the average debtor.
• Often using credit to fund
business expenses, insolvent
Self-Employed Debtors had an
average credit card debt of
$31,917.

25. 25
The Female Debtor
The Female debtor is:
More likely to be divorced, single
or separated than her male
counterpart
More likely to list marital or
relationship breakup as a cause of
their financial difficulties
More likely to be a single parent
Roughly 40% of insolvent debtors are female

26. 26
The Female Debtor
• Female debtors are more likely to have higher
credit card debt and student debt than male
debtors
• They are less likely to own a home
• Female debtors are more likely to file
bankruptcy than male debtors

27. 27
The Female Debtor
Female debtors
(particularly single
mothers) have a
difficult time paying
for basic expenses
such as rent, food
and utilities, let
alone maintaining
debt payments.

28. Worrying about money and debts
has a devastating effect on
individuals and families, alike.
Recognizing the need for help
and talking to a reputable
professional, such as a licensed
insolvency trustee, like Hoyes
Michalos for advice is the first
step in eliminating overwhelming
debt problems.
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The Solution to problem debt!

29. There is hope.
You can be debt free.
Download our Joe Debtor eBook